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

BNM grants MBSB extension until Jan 5 to conclude talks with PNB for MIDF acquisition
Bursa Malaysia publicly reprimands, fines Brem Holdings directors
ASNB declares income distribution of 3.75 sen per unit for ASM 3
UEM Edgenta to strengthen presence in Saudi Arabia with 60% investment in MEEM
Duopharma, govt execute agreement for insulin worth RM375.17mil via direct negotiation
Malaysia's inaugural RM4.5bil sustainability MGII oversubscribed by 2.38 times
Mudajaya secures RM56.93mil job for Senari Port project
DPI explores stake purchase in Australian aerosols manufacturer
Bursa ends flat with key index down on last trading day of 3Q
BNM updates FCA list to include three new schemes

Others Also Read