Posted on 14 Jul 2008
From July 1, industries using more than two million cu ft of
gas a day will enjoy a 70% discount on the market price of gas, now at RM79 per
million British thermal unit (mmmbtu).
The discount will be gradually reduced over 11 years by five
to 10 percentage points a year.
Minister in the Prime Minister's Department Tan Sri Amirsham
A. Aziz said that for small and medium-sized industries, the discount would be
gradually lowered within 13 years.
The new structure, he said, followed appeals from industries
for the Government to reconsider its June 4 announcement on the increase in gas
prices.
“We felt the plight of the industries. There are some 1,500
companies that were affected by the previous announcement and they are critical
to the economy,” he told reporters yesterday.
“Under this new structure, industries using more than two
million cu ft of gas a day will enjoy the new price of RM23.88 per mmmbtu, down
from RM32.56 per mmmbtu, which was to have been effective this month.
“Those using less than two million cu ft a day, including
8,887 households that have gas piped directly to their homes, will enjoy a
price of RM22.06 per mmmbtu beginning Aug 1,” Amirsham added.
The pricing formula would be adjusted each year according to
the market price of gas, he said.
“The total subsidies will be borne by Petronas,” he said,
adding that the new price structure would not be applicable for gas supplied to
the energy sector. The discount is only for industries in Peninsular Malaysia.
Amirsham said it was important to introduce the new
structure as currently, the peninsula was a net importer of gas, with supplies
coming from
“We don’t have enough to cater for local industries here.
With this structure, we hope to be able to encourage industries to be more
efficient as well as build a sustainable policy for gas usage.
“In the long run, our industries should be able to slowly
adjust to the new prices of gas and transform themselves to compete
effectively,” he said.
Apart from the gas price discounts, Amirsham said the
Finance Ministry was still considering offering other incentives to industries.
