Govt yet to decide on power tariff review

STAR, 12 July 2013

KUALA LUMPUR: The Government has yet to decide on the electricity tariff review.

Energy, Green Technology and Water Minister Datuk Seri DrMaximus Johnity Ongkili said there was a need to look at the cost of fuel, gas and other inputs which have been increasing. “There is also a need to look at how Tenaga Nasional Bhd and Petroliam Nasional Bhd can absorb the increase,” he told a media briefing here yesterday.

He said there should be a mechanism for fuel price increases, not only when one party had to bear the cost, be it the Government, utility companies or consumers.

On the water issue in Selangor, Ongkili said what was available in the state was insufficient for its own use, as well as that of the Federal Territory and Putrajaya.

Ongkili said there was a need to work together with the Selangor state government to resolve the issue. — Bernama

Rise in chicken price, a case of foul play?

Malaysian Insider, 13 July 2013

The Agriculture and Agro-based Industry Ministry has not ruled out that the sharp rise in poultry prices was due to price manipulation by retailers as the farm price remains unchanged at RM5 per kg while the supply is adequate.

Its minister Datuk Seri Ismail Sabri Yaakob said the retail prices shot up to between RM8.50 and RM9 per kg although the ministry has fixed the ceiling price at RM7.80 per kg.

He said the demand for chicken was normally 1.2 million birds a day but increased to 2.2 million to 2.4 million a day nationwide during Ramadan through Aidilfitri.

The government has opened applications for chicken import permits to address the problem and theoretically dumping will reduce the price of goods, he told a news conference to announce Tekun Nasional winning the Best Innovation in Financial Services award in Karlsruhe, Germany.

He was commenting on a report that chicken prices have risen dramatically in many states for the past two weeks. He said there was an increase in demand for local chicken two months ago as China stopped exporting poultry following the H7N9 outbreak, but it has lifted the ban as the situation has returned to normal.

Meanwhile, the Domestic Trade, Cooperatives and Consumerism Ministry has urged all quarters not to make any speculation or claim that chicken prices have soared without any concrete evidence.

Its minister Datuk Hasan Malek said the ceiling prices of chicken at the farm, wholesale and retail levels were subject to the Price Control and Anti-Profiteering Act 2011, which must be abided by retailers.

"Provide us with the proof and we will act on it. Action will be taken against unscrupulous traders if the claim is true," he told reporters after visiting a Ramadan bazaar in Presint 2 in Putrajaya yesterday.

Hasan said the price control scheme for the Hari Raya festive season will be enforced early next month.

Meanwhile, the Muslim Consumers Association of Malaysia (PPIM) has urged a boycott on chicken until the prices drop below the ceiling price.

Its chief activist Datuk Nadzim Johan said a boycott would push down the prices as suppliers and retailers would have to lower prices if demand plummeted.

A survey around Kuala Lumpur and Selangor found that supermarkets were selling chicken at about RM7.50 per kg, but the prices in farmers' markets shot up to between RM8.50 and RM9 per kg.

Housewife Siti Rohani Yaakob, 47, expressed hope that the government will take action to protect the welfare of the lower income group against errant traders who took advantage of the festive season to raise prices of goods, including chicken.

Rogayah Ahmad, 64, a mother of eight, said although the price hike was a norm during Ramadan and other festive seasons, she has no choice but to still buy these goods to cater for her family.

Police pensioner Abdul Aziz Yusuf, 64, said he realised chicken prices have soared since April, but did not expect them to reach RM9 per kg during Ramadan. - Bernama, July 13, 2013.

Higher electricity tariff next year?

The Edge Financial Daily, 9 July 2013

KUALA LUMPUR: Malaysians may have to pay more for electricity as Tenaga Nasional Bhd (TNB) is set to resume the fuel cost pass-through (FCPT) mechanism next year.

Deputy Energy, Green Technology and Water Minister Datuk Seri Mahdzir Khalid told Parliament yesterday that TNB will start implementing the mechanism next year to more efficiently regulate the electricity tariff for users.

The FCPT mechanism allows any changes in fuel cost to be channelled to users through tariff rates implemented by the government. Any additional fuel cost incurred due to higher fuel prices will be reflected by a higher electricity tariff and any reduction or savings will be returned to consumers.

FCPT has been adopted by utilities in many countries such as Singapore, Thailand, the Philippines, Japan, the US and Europe. It will be assessed every six months in tandem with the six-monthly natural gas price revision and taking into account the prevailing market coal and oil prices.

“With the implementation of FCPT, users will be given an incentive if power is used economically and a penalty would incur if power wastage is detected. “This programme will be implemented based on the country’s economic performance. Users’ cost of living will also be taken into account,” Mahdzir said in Parliament in reply to a question from Liang Teck Meng (BN-Simpang Renggam).

Mahdzir said the FCPT mechanism is a component in the incentive base regulation (IBR) programme. Although the mechanism was first introduced in mid-2011 and was supposed to be reviewed every six months to reflect movements in fuel prices, TNB has only revised its power tariff once.

The last adjustment in 2011 reflected the increase in gas price, which jumped from RM10.70 per million British thermal units (mmBTU) to RM13.70 per mmBTU, while the coal price is still assumed at US$85 (RM234) per tonne. The rates were revised to partly cover for the increase in electricity cost of supply since the last base tariff review in June 2006.

The last round of adjustments saw an average tariff increase of 7.12% following the 28% upward revision of the natural gas price. There was also an average 2% increase to partly cover the increase of electricity cost of supply since June 2006. Industrial and commercial consumers saw an average increase of 8.35%.

Domestic or residential consumers whose monthly consumption falls within the “lifeline band” of up to 200 kWhsaw no tariff increase as rates remained unchanged at a highly subsidised rate of 21.8 sen per kWh or approximately RM44 per month. The last tariff review of the lifeline band was done in 1997.

Consumers using 300kWh per month and below saw tariffs maintained at 33.4 sen per kWh. Those who use more than 300kWh per month will have to pay a rate of at least 40 sen per kWh.

According to TNB, about 75% of the household consumers, or 4.4 million people, use less than 300 kWh so they were not affected by the tariff increase.

Additionally, Mahdzir said consumers who use below 200kwh a month are subsidised, while payment from those with usage below RM20 is waived.

In April 2011, a 1% charge was imposed as feed-in-tariff for the renewal energy fund.

TNB is still paying RM13.70 per mmBTU for natural gas, which has been unchanged since June 2011. Gas remains the largest component of TNB’s fuel generation mix followed by coal and oil.

Recently, the power sector was badly hit by a gas shortage. TNB, in particular, saw an additional RM3.07 billion in fuel costs to burn distillates as an alternative fuel from Jan 1, 2010 to Oct 31, 2011.