Gas price hike in 2018

The Myanmar Times - Weekend - - International Business -

THE price of gas used for cook­ing and fuel by the in­dus­trial and com­mer­cial sec­tors will be in­creased next year, re­flect­ing the higher price of nat­u­ral gas in the in­ter­na­tional mar­ket. This will be the first gas tar­iff hike since July 2016.

The in­crease to the ef­fec­tive tar­iff rate is sig­nif­i­cant, at an av­er­age of RM4.47 per mil­lion Bri­tish ther­mal units (mmbtu) or 16%, as it in­cludes a sur­charge un­der the new gas cost passthrough (GCPT) mech­a­nism.

Among the sec­tors that will be heav­ily im­pacted is the rub­ber glove in­dus­try, which is set to see costs in­crease by an av­er­age of US$0.50 to US$0.75 per 1,000 pieces of gloves, de­pend­ing on the type of gloves and ef­fi­ciency of the fac­to­ries.

The Malaysian Rub­ber Glove Man­u­fac­tur­ers As­so­ci­a­tion told Star­biz that Malaysian glove­mak­ers were within the cat­e­gory of busi­nesses cur­rently pay­ing RM26.11 per mmbtu, and would be sub­ject to a 14.5% in­crease fol­low­ing the tar­iff hike. He said the in­crease was sig­nif­i­cant and that glove­mak­ers would have to pass the ad­di­tional costs to cus­tomers.

“How­ever, we are quite an­noyed as we have al­ready re­quested that Gas Malaysia Bhd gives us at least a twoto three-month no­tice be­fore the tar­iff re­vi­sion, as this will al­low us to fac­tor in the cost so we can pass it on to the con­sumers – but we were not given any such no­tice.

“Now, we only have a 30-day pe­riod to give no­tice to our cus­tomers and this is not enough. Glove­mak­ers will be forced to ab­sorb one or two months of ad­di­tional costs be­fore it can be passed on to our cus­tomers,” he said.

He added that the un­ex­pected ad­di­tional costs were a loss of rev­enue for the in­dus­try as well as the coun­try.

Gas Malaysia an­nounced yes­ter­day that the govern­ment had ap­proved, via a let­ter from the En­ergy Com­mis­sion dated Nov 28, the re­vi­sion of the nat­u­ral gas tar­iff for the non-power sec­tor in Penin­su­lar Malaysia from Jan 1 to June 30, 2018.

It told the stock ex­change that the govern­ment had pre­scribed the in­cen­tive-based reg­u­la­tion (IBR) frame­work which set the base tar­iff for a reg­u­la­tory pe­riod of three years from Jan­uary 2017 and al­lows changes in the gas costs to be passed through via the GCPT mech­a­nism ev­ery six months.

The av­er­age nat­u­ral gas base tar­iff was set at RM30.90 per mmbtu for the pe­riod be­gin­ning Jan­uary to June 2018. In ad­di­tion to this, un­der the GCPT mech­a­nism, a sur­charge of RM1.62 per mmbtu will ap­ply to all tar­iff cat­e­gories due to the higher liq­ue­fied nat­u­ral gas price against the ref­er­ence price in the base tar­iff dur­ing this pe­riod, the group said.

This trans­lates to an av­er­age ef­fec­tive tar­iff of RM32.52 per mmbtu across

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