KUALA LUMPUR: Malaysia’s iron and steel makers have opposed the proposed 10% hike in natural gas prices and they want the government to stop Gas Malaysia Bhd
from going ahead with it on July 1.
The Malaysian Iron and Steel Industry Federation (MISIF) said on Thursday it was “utterly disappointed and deeply concerned” with the price increase as announced.
Gas price supplied to industries would go up by RM2.03 per million British thermal unit (MMBtu). This is an increase of about 10% from RM19.77 MMBtu to RM21.80 MMBtu for industrial users, including steel producers in Peninsular Malaysia.
MISIF claimed that Gas Malaysia, being a monopoly supplier of natural gas to the industrial users in the country, posted sterling profit results of above RM160mil continuously for the past three financial years (2012 – 2014).
“With such excellent earnings, we view the recent price increase as not only unjustified but also smacked of excessive profiteering.
“This should warrant an immediate investigation by the Ministry of Domestic Trade, Cooperatives and Consumerism on Gas Malaysia Bhd to curb such unhealthy activity,” it said.
MISIF said there was no justifiable reason for Gas Malaysia to increase the gas price as the international natural gas price was trading at only US$2.84/MMBtu (RM10.70/MMBtu) on the New York Mercantile Exchange (Nymex).
Moreover, the Nymex natural gas price was US$4.53 MMBtu one year ago, a drop of 37.3% year-on-year as compared to Gas Malaysia’s tariff, which increased from average tariff of RM19.32/MMBtu to RM21.80/MMBtu, an increase of 12.8%.
“This clearly shows that the domestic natural gas pricing is moving against the world trend.
“The price hike comes at an inopportune time, especially so soon after the recent implementation of Government’s regulatory decisions, particularly the implementation of the Goods and Services Tax (GST) effective April 1, 2015 that has brought adverse impact on the cost of doing business in relation to financial cash flow of businesses,” MISIF said.