KUALA LUMPUR: Small and medium-scale manufacturers fear that they may not be globally competitive if the Government decides to increase the price of gas for industrial use, an industry source said.
For industries to continue to manufacture, create employment, and, in short, survive, the source said more gas should be given to the sector and any price increase should be applied to all players.
For instance, he said, manufacturers now pay RM12.87 per MBTU (million British thermal unit) but Petronas sells subsidised gas to Tenaga Nasional Bhd and independent power producers (IPPs) at just RM6.40 per MBTU.
Yet, the power generation sector consumes 60% of total gas production in Peninsular Malaysia, while manufacturers consume a mere 12%, while the rest was exported.
“We, the small consumers, are paying double compared to the power sector, although they have a bigger piece of the cake,” he said.
He said overall (including Sabah and Sarawak), Petronas produces 60 billion cubic metres of natural gas in the country, accounting for 2.1% of worldwide production.
He asked why it was not possible to reduce the export of gas produced in Peninsular Malaysia, which could then be channelled to the non-power sector.
“I am afraid that we may have to pay RM15 per MBTU if there is a price increase. If there is one, then it should involve the power sector,” he said in an interview, near here, yesterday.
In addition, he said, since December 2005, Gas Malaysia Sdn Bhd had stopped signing new supply agreements due to curtailments by Petronas. This prevents manufacturers from buying gas if they wish to expand or relocate their businesses.
It was reported in StarBiz on Sept 19 that a hike in gas price is imminent, and although the quantum is in question, it is speculated that there will be a 15% increase in the price of gas for industrial use.
Energy, Water and Communications Minister Datuk Seri Dr Lim Keng Yaik said that a Cabinet committee chaired by the Prime Minister would decide tomorrow the next gas policy and gas prices for TNB and IPPs.
When contacted, FMM Malaysian Ceramic Industry Group, under the Federation of Malaysian Manufacturers, said it felt that the burden of future increases in gas prices should be shared by all consumers of natural gas.
Its chairman Raja Datuk Abdul Aziz said “favouritism” was practised when it came to TNB and IPPs.
“It is time to be fair, and it is time for the big players to pay more too,” he added.
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