PE and KE

Both are correct.

Intermolecuar force is electrostatic in nature. They are attractive forces that exist between molecules of a subatnce. The force weakens when the distance of separation between molecules increases. Thus the potnetial energy between molecules increases as their separation increases (similar to raising an object to a certain height, which is then farther away from the centre of the earth) and vice versa.

However, there is a mimimum distance, usually called the [distance of cloest appraoch]. where the attractive force ceases. This distance is about 10^-10 m for typical molecules, and is normally treated as a molecular diameter. At such distance, it can be constued that the molecules are touching each other at their boundaries, further decrease of their separation would make the outer electron clouds of the molecules to overlap.

Since electrons repel one another, the intermolecular force now becomes repulsive. Thus at separtion smaller than a molecular diameter, the molecules experience repulsive intermolecular force. This explains why molecular collision can be regarded as an elastic collision as electrostatic repulsive force is a conservative force.