The increase in electricity tariffs will have a minimal impact on the country's inflation rate which is projected to rise by 0.27%, said Energy, Green Technology and Water Minister Datuk Seri Peter Chin Fah Kui.
“Low electricity users such as domestic or commercial users, including the cottage industry and food outlet operators, will not feel the pinch as “they do not use electricity to fry kuey teow or to fry rice,” he said at a joint press conference with Minister in the Prime Minister's Department Tan Sri Nor Mohamed Yakcop to announce the new tariffs for gas and electricity yesterday.
Nor Mohamed said the tariff increase would allow the country to manage its energy efficiently and avoid “misalignment of national resources”.
He added that despite the higher gas and electricity tariffs, Malaysians continued to enjoy a much lower rate of RM13.70 per million British thermal units (mmBtu) compared to regional consumers.
He said gas sold to the power sector in Thailand was RM18.23 per mmBtu, Indonesia (RM21.04 per mmBtu), Singapore (RM43.32 per mmBtu) and Vietnam (RM18.78 per mmBtu).
Nor Mohamed said although the gas prices would be reviewed every six months, a price increase would not be automatic, adding that Petronas had spent RM131.3bil to subsidise gas from 1997 to 2010.
“This year's subsidy payment is supposed to be RM27.22bil but with the revision, it is now down to RM25.64bil,” he said.
Nor Mohamed added that 36% of gas supplied by Petronas to its users was imported and the current market price was RM47.42 per mmBtu.
Chin said there would be no automatic increase in electricity tariff although the Government would review the price of gas every six months.
He said the Government had agreed on the principle of “fuel cost pass-through” where Petronas would forgo part of its revenue to enable the power sector to produce low-tariff electricity for the people.
“Even if there is a review for gas every six months, it does not mean electricity tariff will be automatically reviewed,” he added.
Chin dismissed claims that independent power producers (IPPs) received gas subsidies from the Government, saying the allegation was “totally untrue and baseless”.
“The Government has never provided any financial assistance to the IPPs so that they could reap higher profit as claimed by certain quarters.
“The so-called gas subsidy' is actually a certain amount of revenue forgone or released by Petronas in accordance with the Government's decision to fix gas prices for the power sector to have a low electricity tariff for the people,” he said.- THESTAR
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