GAS Malaysia Sdn Bhd is confident of posting higher revenue next year as the revised tariff for natural gas in the non-power sector will boost demand and usage of the energy source in commercial and industrial applications.
Chairman Tan Sri Tajuddin Ali said the lower price would ensure the competitiveness of natural gas against other fuels.
In fact, some of our customers who had anticipated the reduction in natural gas price had applied for re-conversion to gas from diesel or medium fuel oil usage, he said at a media briefing on the new natural gas tariff in Kuala Lumpur yesterday.
He said Gas Malaysia was not expecting an immediate surge in sales as the company would take between three and six months, depending on the location, to complete the laying of new gas pipelines.
Although the new tariff will encourage usage of more natural gas, we must still do our work by getting new customers and not depend on old ones, he said.
Gas Malaysia has 3,150 customers consisting of 216 industrial users, 114 commercial users, and 2,820 residential users.
Energy Commission chairman Datuk Mohd Annas Mohd Nor, in announcing the tariff revision, said the new pricing effective from Oct 1 last year until Dec 31, 2005, was more attractive and stable, and was expected to promote the diversification of natural gas usage in the industrial, commercial and domestic sectors.
He said the new tariff also saw the removal of fixed monthly and infrastructure capital contribution charges for all tariff categories.
Annas said that depending on the tariff categories, some users might enjoy up to 50% savings with the new pricing.
He said the fixed gas price system stabilised the price of natural gas compared with other fossil fuels that were still linked to volatile international crude oil prices.
If the natural gas price is linked to the crude oil price of US$35 per barrel, the price of natural gas may cost twice as much or more, he said.
Domestic users, under Category A, are charged 75 sen per cu m of gas from 80 sen previously and the minimum monthly payment is reduced from RM10 to RM5.
Category B, or commercial users, with annual gas consumption not exceeding 600 million British Thermal Units (mmBTU) are charged 58 sen per cu m of gas consumption from 75 sen. The minimum monthly gas consumption is 210 cu m.
Category C, or commercial and industrial users, with annual gas consumption from 601 to 5,000 mmBTU are charged 51 sen per cu m from 65 sen previously. The minimum monthly gas consumption is 980 cu m.
For Category D, or commercial and industrial users, with annual gas consumption from 5,001 to 50,000 mmBTU the rate is maintained at 50 sen per cu m. The minimum monthly gas consumption is 1,600 cu m.
Under Categories E and F industrial users with annual gas consumption from 50,001 to 750,000 mmBTU the rate is 49 sen per cu m. The minimum monthly gas consumption is 25,000 cu m.