‘Gas price low, still subsidised by govt’

KUALA LUMPUR: Prime Minister Tun Dr Mahathir Mohamad has shot down appeals from the business community to reduce gas tariffs, justifying that the current gas price is low and still being subsidised by the government.

“We are selling gas at subsidised price. Prices are very low, lower than in big oil producing countries. What more can you ask?” said Dr Mahathir at the signing ceremony between KA Petra Sdn Bhd and Hutchison Port Holdings Ltd to jointly develop the world’s largest ship-toship transfer hub in Malaysia here yesterday.

He was responding to a query if the government would reduce gas tariffs in view of significant drop in liquid natural gas (LNG) in the international market.

The Asian LNG pricing benchmark of Japan Korea Marker futures was at US$11.81 (RM48) per MMBtu in September last year, at its highest for the past one year. Prices have fallen by 60 per cent to US$4.40 per MMBtu this week.

In December last year, Gas Malaysia announced that natural gas base tariff for the non-power sector in Peninsular Malaysia will rise to RM32.69 per MMBtu from RM31.92 per MMBtu for January to June this year.

The price increase, along with a 23 sen per MMBtu gas cost pass through surcharge, translated to 0.7 per cent increment to RM32.92 per MMBtu.

In Singapore, the government had approved a 0.81 per cent gas tariff cut from 19.67 cents per kWh, to 19.51 cents per kWh, in the first quarter of this year.

The Singapore government had further cut gas tariffs by 3.64 per cent, from 19.51 cents per kwh, to 18.80 cents per kwh, from April to June this year,.

When asked to comment on the Singapore government lowering gas tariffs for the first half of this year, Dr Mahathir, with a wry smile said: “Okay, please go and buy gas from Singapore. We don’t live there but if we prepare makan in Johor, they all come and eat. So, you can go and buy gas there and you would know what’s the price of gas?”