Malaysian Insider, May 19, 2011
“We have done a discussion and study under the Ministry of Energy, Green Technology and Water, EPU (Economic Planning Unit) and myself,” Husni told reporters at the sidelines of the 15th Malaysia Banking Summit today when asked if the subsidies will be relooked at. “We have to wait for the decision.”
The issue of gas subsidies is also a controversial one as the prime beneficiaries are seen to be the IPPs, many of which are highly profitable and perceived to be controlled by politically-favoured parties.
DAP recently urged the Najib administration to first cut billion-ringgit subsidies for IPPs rather than burden the people with subsidy cuts on essential items
“Remove the big opium of gas subsidies that can save tens of billions of ringgit annually before dealing with the opiate for the masses that only save hundreds of millions of ringgit,” said DAP secretary general Lim Guan Eng in a statement recently.
“Why should the masses and the ordinary 27 million Malaysians be made to bear these price rises when the few big corporate giants in the IPPs do not suffer a single cent in gas subsidies cuts?”
DAP publicity chief Tony Pua added that the government must take action against “fat crony companies” like IPPs if it wished to reduce subsidy burden, as last year’s five-in-one subsidy cut would only save RM750 million while a 20 per cent cut in subsidies to IPPs would save RM3.6 billion.
The Petaling Jaya MP said while there was no doubt that the cost would be passed on to consumers, unfair contracts signed between the government the IPPs meant that electricity tariffs should be at least 26 per cent cheaper based on comparison to international rates
He said that based on Petronas annual reports, gas subsidies granted to IPPs amounted to RM8.1 billion in 2008.
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