Piped gas price in Peninsular Malaysia still sold below market price

KUALA LUMPUR: The price of piped gas in Peninsular Malaysia, which will be increased by RM1.50 per million metric British thermal units (mmBtu) for January-July 2016, is still sold below the market price, said Tenaga Nasional Bhd (TNB) chairman Tan Sri Leo Moggie. 

However, under an agreement between TNB and Petroliam Nasional Bhd (Petronas), gas is supplied at RM15.20 per mmBtu for the first 1,000 million standard cu ft per day (mmscfd) compared with the liquefied natural gas (LNG) market price of RM46.041 quoted by Petronas for the period from October to December 2014. 

He said under the Government's subsidy rationalisation programme, the piped gas price would be revised gradually every six months until it reached the market price.

"However, at the moment it is still subsidised (by the government)," he told a press conference after TNB's AGM in Kuala Lumpur on Monday.

Earlier this month, the Government announced that piped gas price in Peninsular Malaysia had risen by RM1.50/mmBtu to RM18.20/mmBtu for January-July 2016, from RM16.70/mmBtu in July-December 2015.

TNB president and chief executive officer Datuk Seri Ir Azman Mohd said overall, there was still a rebate.

"Once we approach next July, I think the Government will review how much savings we have and that will be translated into the new tariff rebate," he said.

 On the recent announcement on the electricity tariff rebate, he said, the Government would review the price every six months.

"We still have savings because fuel prices are coming down and coal prices have also come down quite a lot ... but you must take into account the foreign exchange, which is a factor to coal prices.

"Coal prices did not go as low as we would like due to the weakening of ringgit but they are still below what is fixed at the base tariff prices.

"We are using less energy, so that brings down the fuel generation cost, and this constitutes the component that we can give rebate on," he said.

The Government announced last Tuesday that electricity tariff rebate for Peninsular Malaysia will be at 1.52 sen per kWh compared with 2.25 sen per kWh from July until December this year, emanated from fuel cost savings and the Imbalance Cost Pass-Through of RM762.03mil for the July-December period this year.

The savings were due to lower LNG prices on the global market as well as efficiency improvements by gas- and coal-fired power plants. - Bernama