Investment

Monday, July 20, 2009

Electricity tariff will go up only if gas price rises

Sources: The Star Online

KUALA LUMPUR: The electricity tariff increase will only be implemented if the gas price is raised by the Government, Tenaga Nasional Bhd (TNB) president and chief executive officer Datuk Seri Che Khalib Mohamad Noh said on Saturday.

He said the tariff increase was intended to cover higher operating costs as a result of the rise in fuel prices.

“For TNB, when the gas price goes up, we need to make adjustments to the tariffs,” he told reporters at the TNB Family Day gathering at headquarters level here.

Khalib said that when fuel prices came down, the electricity tariffs were also adjusted accordingly.

“The gas price is determined by the Government and if it is raised, then we need to adjust our tariffs to take that into account,” he said when asked about the possiblity of a tariff increase if the gas price is raised.

Energy, Green Technology and Water Minister Datuk Peter Chin Fah Kui said recently that the National Economic Advisory Council has made a decision on the revision of electricity tariffs in line with the fuel price movements.

He said that any electricity tariff increase would not affect the lower income group as the Government had reduced the rates by an average 3.7% to 31.31 sen per kilowatt hour from 32.5 sen, effective March 1, 2009.

Khalib said the current fuel prices were higher when compared to that at the beginning of this year. — Bernama

“The decision to look into the gas price, whether to increase or not, is up to the Government. The gas price in Malaysia is not the market price,” he said, adding that with the various subsidies given, the gas price was much lower than the market price.

“If we are to pay the market price, then the gas price and electricity tariffs will be much higher than what we are enjoying now,” he added.

On the Bakun hydroelectric power project, Che Khalib said companies interested to participate in undersea cable portion could submit their tenders early next year.

“Those who qualify or are capable can tender for it early next year under the open tender process,” he said, adding that the process to evaluate the tenders usually requires about six months.

The transmission cable and undersea cable project is reported to be worth between RM8bil and RM10bil, involving a 730km high-voltage direct transmission line and 670km undersea cable for the Bakun dam.

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