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Concerns About Impact Of Possible Cumulative Gas Price Hikes

FMM In The News: The Star, December 31, 2017

PETALING JAYA: The Federation of Malaysian Manufacturers (FMM) is concerned about the impact of possible cumulative gas price hikes by end of 2019 due to the uncertain global economy in the next few years.

The industry group yesterday issued astatement following the announcement by the Energy Commission about the natural gas (NG) tariff rebate of 40 sen per mmBtu from January to June 2017.

The FMM said while it welcomed therebate, it was concerned about a possible cumulative gas price increase of22.6% by end of 2019.

“FMM recognises that the gas cost pass-through (GCPT) mechanism is in place and that the average base tariff,which takes into account the increase in volume of LNG import and foreign exchange fluctuations, would be adjusted according to the GCPT announcement for the relevant period.

“Nevertheless, FMM is hopeful thatthe Government would continue to consider industries competitiveness vis-à-visregional competitors in the energy subsidy rationalisation and the proposed transition to market price and to continually assess the impact of price reviews against the prevalent economic and market conditions.

“FMM would continue to advocate for afair pricing of natural gas, in particular for the locally sourced piped gas,and seek further engagement with the Government to obtain further clarity onthe basis of the average base tariff determination for the next three years,”said the trade body.

On Thursday, Gas Malaysia Bhd said the Energy Commission had approved the average base tariffs for the regulatory period from January 2017 to end-2019.

This would see the average base NGtariff to be RM32.74 per mmBtu by 2019 from RM26.71 per mmBtu in January 2017.

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