KUALA LUMPUR: The independent power producers (IPPs) which are assisting Tenaga Nasional Bhd (TNB) in the production and generation of electricity are not a free service and are paid based on the contractual price.
“The IPPs also have their costs to bear,” said former Malaysian Investment Development Authority (Mida) director-general and chief executive officer Datuk Jalilah Baba to Bernama here.
She was commenting on Pakatan Rakyat’s (PR) manifesto, specifically on its plan to withdraw gas subsidies to the IPPs.
The opposition had claimed that withdrawing subsidies to the IPPs could reduce the price of electricity. The move is part of its initiative to lower the burden of the rakyat.
However, according to Energy, Green Technology and Water Minister Datuk Peter Chin Fah Kui, the RM18bil and RM20bil a year, which was accused by PR as subsidy, was the profit that Petroliam Nasional Bhd had to forgo for having to sell gas below the market price to the IPPs and TNB.
He said the lower gas price was fixed by the Government to keep the electricity tariff low.
Jalilah said the Barisan Nasional government had already planned and scheduled the reduction of subsidies. Apart from that, she said the Petronas Regassification Project, which is going to be in production soon, would see more gas supply that was more than enough to meet the demand from households and industries.
Meanwhile, on PR’s plan to pay 5% to 20% oil royalties to Sabah and Sarawak, she said there must be a reasonable calculation and discussion with the states.
This was to balance the contribution of the Federal Government to these states in terms of infrastructure, modernisation, industrialisation and bringing in investors for the well being of the people, she said. — Bernama