Sunday, November 23, 2008

Electricity tariff review next year

2008/11/23
BERNAMA

JASIN: Tenaga Nasional Bhd (TNB) will not be reducing the electricity tariff rate although the price of oil has come down, Minister of Energy, Water and Communications Datuk Shaziman Abu Mansor said.

This was because the electricity generated in the peninsula did not come from oil.

"In the peninsula, we get electricity from three sources, namely gas, which accounts for 60 per cent, coal (30 per cent) and hydro power (six to seven per cent). The rest comes from other sources," he said after the opening of a programme for the ministry's customers here yesterday.

The event was officiated by Chief Minister Datuk Seri Mohd Ali Rustam.

Shaziman said he needed to explain the situation as certain parties were making out that the government was an uncaring one, refusing to reduce the electricity tariff even though oil was cheaper.
He said the price of gas supplied by Petroliam Nasional Bhd (Petronas) to the industrial parties that were producing electricity was RM14.31 per mmBtu (million British thermal units).

This price was much lower than the cost Petronas incurred to produce one unit of mmBtu, which ranged between RM20 and RM25.

"But, Petronas is selling gas to the energy sector at only RM14.31 per mmBtu, which means there is a big gas subsidy being given by the government to the energy sector via Petronas."

The price of coal had not come down to below US$75 (RM275) per tonne since July 1, when the upward revised electricity tariff rate took effect, Shaziman said.

In fact, the price of coal had gone up to between US$80 and US$90 per tonne.

"If the price of coal drops to below US$75 per tonne, the ministry will ask TNB to review its electricity tariff rate downwards."

He said a review would be done in June and take into account the price of coal and gas, which would depend on the international market.

The electricity tariff would be announced in July.

If there was a slowdown in the economy and the demand for coal dropped, then its price might come down, he said, adding that 90 per cent of the coal Malaysia used was imported from Indonesia. -- Bernama