Steel makers oppose gas price hike, wants govt to step in

  • Business
  • Thursday, 11 Jun 2015

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. 

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 1
Cxense type: free
User access status: 3
Subscribe now to our Premium Plan for an ad-free and unlimited reading experience!

Next In Business News

U.S. weekly jobless claims edged lower last week
Govt channels RM20.94bil for wage subsidy programme as at July 29
Yinson inks MoU with Cyberview to develop smart mobility ecosystem in Cyberjaya
Bursa Malaysia onboards CGS-CIMB, Kenanga IB for shariah-compliant trading
Sunway REIT's outlook remains optimistic
Ringgit eases further as risk-off mode remains after Fed’s minutes
Gas Malaysia 2Q net profit surges 72%, declares 5.9 sen dividend
Dialog 4Q net profit drops 14% to RM118mil
AME Elite to develop industrial park in Penang with GDV of RM1bil
Bursa Malaysia ends lower for second consecutive day

Others Also Read