The Finance Ministry has clarified that Petron has been appointed as one of the federal government's fuel providers to foster healthy competition.

In a statement this evening, the ministry also stated that the company was one of three fuel providers. The other two are Petronas and Shell.

"Petron is not the sole petrol and diesel provider for federal government vehicles.

"We emphasise that Petronas and Shell have been (the government's) fuel providers since 1997 and they will continue to do so.

"The appointment (of Petron) was done administratively as it is linked to operational matters and does not involve any financial implications for the government.

"The government will be able to choose between Petronas, Shell and Petron, offering more opportunity and healthy competition among petrol and diesel providers," it added.

The ministry said other fuel companies were free to apply provided they met the criteria.

“The government does not limit the number of fuel providers, providers that are credible and have a nationwide network of fuel stations can apply,” it said.

The ministry was responding to the letter confirming Petron's appointment which had gone viral.

The appointment raised eyebrows as Prime Minister Dr Mahathir Mohamad's son Mirzan is a director in Petron's parent company Petron Corporation, which is based in the Philippines.

Mirzan has been a director and shareholder in Petron Corporation since 2010. In that year, he had 1,000 shares.

Under the company’s by-laws, a person has to be a shareholder to qualify as a director.

However, Petron Malaysia said in 2013 that Mirzan did not have any shares or a role in its Malaysian operations.

This is not the first time Petron has courted controversy. In the past, the then opposition had called for a boycott of the firm on allegations of cronyism.