Natural gas consumers to pay more from Jan 1, 2018

To recap, the government had prescribed the incentive based regulation (IBR) framework which sets the base tariff for a regulatory period of three years from January 2017.

KUALA LUMPUR: The non-power sector in Peninsular Malaysia will have to pay more for their natural gas with effect from Jan 1, 2018 after the government approved the increase.

Gas Malaysia Bhd said on Wednesday the base tariff for the period Jan 1 to June 30 is increased to RM22.30 per million British Thermal Units (MMBtu) from RM20.23. 

The effective tariff after the gas cost pass through (GCPT) mechanism will be RM23.92.

The company said it had received the government's approval, via the letter from  Suruhanjaya Tenaga, for the revision from Jan 1 to June 30, 2018.

“The average natural gas base tariff is set at RM30.90 per million British Thermal Units (MMBtu) for the period beginning January to June 2018.

“In addition, under the GCPT mechanism, a surcharge of RM1.62 per MMBtu will apply to all tariff categories due to the increased LNG price against the reference price in the base tariff in this period,” it said.

Gas Malaysia said the government had prescribed the incentive based regulation (IBR) framework which sets the base tariff for a regulatory period of three years from January 2017. This allows changes in the gas costs to be passed through via the GCPT mechanism every six months.

“While the tariff revision has no material impact on Gas Malaysia’s business operations, it is expected to contribute positively towards the financial position of the Company for the financial year ending Dec 31, 2018,” it said.
 
A BTU is a measure of the energy content in fuel, and is is used in the power, steam generation, heating and air conditioning industries. One BTU is equivalent to 1.06 Joules. Natural gas is usually measured in BTUs.