National power supplier Tenaga Nasional Berhad (TNB) will review its power tariff rates when the government does the same for gas prices.
MCPXTNB chief executive officer Che Khalib Mohamad Noh said the upward adjustments of the new electricity tariffs will reflect the government's decision to reduce fuel subsidies which include gas, diesel and petrol.
"This particular adjustment or upward movement in tariff basically illustrates that when there is a revision in gas prices, whether upwards or downwards, there will be adjustment to tariffs," he told a press conference at the TNB headquarters in Kuala Lumpur.
The new electricity tariff rate revealed yesterday by Prime Minister Abdullah Ahmad Badawi will take effect on July 1 and will only apply to Peninsula Malaysia.
In the government’s move to reduce subsidies for fuel, petrol price went up by a hefty 78 sen - a massive 40.6 percent jump from RM1.92 per litre to RM2.70 effective midnight.
He also said that the government would review the oil market price on a monthly basis and announce the subsidised fuel prices accordingly.
Not on a monthly basis
Asked if TNB will also review its tariffs on a monthly basis to correspond with the government’s move, Che Khalib said this is unlikely to happen.
"I don’t think (we will review the tariffs monthly) because the current fuel price is still heavily subsidised. This formula would only be applicable when gas price movement is on a monthly basis.
"But now since govt is fixing the fuel price, that’s why we don’t think there will be a monthly revision in prices," he said.
TNB had called for the press conference to explain the new tariffs structure and how it will affect Malaysians.
According to the new structure, the current rate of 21.8 sen per unit for the first 200kWh (kilowatt units per hour) per month will remain.
"59.1 percent or 3.28 million consumers will not experience any increased rates," Che Khalib said.
However, consumers who use 201 to 400 units will pay up to 34.5 sen per unit - up from 28.9 sen - an increase of 19.4 percent.
Users who use more than 400 units will have to pay higher rates.
"So those using 1-400 unit will remain to receive subsidies for the first 200 units consumed. Consumers using 400 units and above are not entitled to any subsidy at all," he stated.
The first 500 units are now priced at 30 sen per unit with gradual increases all the way until 900 units. Usage above 900 units is capped at 46 sen per unit.
Meanwhile, low voltage commercial and industrial consumers using up to 200 units per month will experience lower average increase of 18 percent.
However, commercial and industrial consumers using more than 200 units are expected to experience an average increase of 26 percent.
Che Khalib explained that the new tariffs were necessary to deal with the rising fuel cost that has risen more than 100 percent and it is untrue that TNB was passing its costs to the public.
"The increase of labour and material costs are all currently being absorbed by TNB. It’s untrue that TNB is passing all its costs to the public.
"This adjustment exercise is to fully deal with the increasing gas prices and a part of the coal costs. We will try to absorb as much costs as we can," he said.
Gas price gone up
According to him, the price of gas has increased by 123 percent from RM6.40 per mmBTU (million British Thermal Unit) to RM14.31 per mmBTU while coal has risen by more than 170 percent since 2006.
"TNB has been purchasing gas from Petronas at RM6.40 per mmBTU which is a reasonably low tariff because of the low subsidy by the government. The RM14.31 provided by the government is still a large discount to the market rate.
"From my understanding according to Petronas, the current market price is between RM30 to RM40 mmBTU," he said.
Gas and coal constitute 68 and 26 percent respectively of the total generation mix in Peninsula Malaysia. The rest is powered by hydro and multi fuel distillates.
"The increased costs will add approximately RM4.2 billion per annum to TNB’s gas cost and another RM1.4 billion to the coal cost. That’s a total RM5.6 billion," he said adding that this will reduce the companies profits from this year.
Che Khalib also disclosed that TNB will initiate negotiations with Independent Power Producers (IPPs) to find ways to help the consumers together.
"From the preliminary feedback I have received, they are ready to discuss to find solutions together," he added.
Also present at the press conference was TNB chairperson Leo Moggie.
MCPXTNB chief executive officer Che Khalib Mohamad Noh said the upward adjustments of the new electricity tariffs will reflect the government's decision to reduce fuel subsidies which include gas, diesel and petrol.
"This particular adjustment or upward movement in tariff basically illustrates that when there is a revision in gas prices, whether upwards or downwards, there will be adjustment to tariffs," he told a press conference at the TNB headquarters in Kuala Lumpur.
The new electricity tariff rate revealed yesterday by Prime Minister Abdullah Ahmad Badawi will take effect on July 1 and will only apply to Peninsula Malaysia.
In the government’s move to reduce subsidies for fuel, petrol price went up by a hefty 78 sen - a massive 40.6 percent jump from RM1.92 per litre to RM2.70 effective midnight.
He also said that the government would review the oil market price on a monthly basis and announce the subsidised fuel prices accordingly.
Not on a monthly basis
Asked if TNB will also review its tariffs on a monthly basis to correspond with the government’s move, Che Khalib said this is unlikely to happen.
"I don’t think (we will review the tariffs monthly) because the current fuel price is still heavily subsidised. This formula would only be applicable when gas price movement is on a monthly basis.
"But now since govt is fixing the fuel price, that’s why we don’t think there will be a monthly revision in prices," he said.
TNB had called for the press conference to explain the new tariffs structure and how it will affect Malaysians.
According to the new structure, the current rate of 21.8 sen per unit for the first 200kWh (kilowatt units per hour) per month will remain.
"59.1 percent or 3.28 million consumers will not experience any increased rates," Che Khalib said.
However, consumers who use 201 to 400 units will pay up to 34.5 sen per unit - up from 28.9 sen - an increase of 19.4 percent.
Users who use more than 400 units will have to pay higher rates.
"So those using 1-400 unit will remain to receive subsidies for the first 200 units consumed. Consumers using 400 units and above are not entitled to any subsidy at all," he stated.
The first 500 units are now priced at 30 sen per unit with gradual increases all the way until 900 units. Usage above 900 units is capped at 46 sen per unit.
Meanwhile, low voltage commercial and industrial consumers using up to 200 units per month will experience lower average increase of 18 percent.
However, commercial and industrial consumers using more than 200 units are expected to experience an average increase of 26 percent.
Che Khalib explained that the new tariffs were necessary to deal with the rising fuel cost that has risen more than 100 percent and it is untrue that TNB was passing its costs to the public.
"The increase of labour and material costs are all currently being absorbed by TNB. It’s untrue that TNB is passing all its costs to the public.
"This adjustment exercise is to fully deal with the increasing gas prices and a part of the coal costs. We will try to absorb as much costs as we can," he said.
Gas price gone up
According to him, the price of gas has increased by 123 percent from RM6.40 per mmBTU (million British Thermal Unit) to RM14.31 per mmBTU while coal has risen by more than 170 percent since 2006.
"TNB has been purchasing gas from Petronas at RM6.40 per mmBTU which is a reasonably low tariff because of the low subsidy by the government. The RM14.31 provided by the government is still a large discount to the market rate.
"From my understanding according to Petronas, the current market price is between RM30 to RM40 mmBTU," he said.
Gas and coal constitute 68 and 26 percent respectively of the total generation mix in Peninsula Malaysia. The rest is powered by hydro and multi fuel distillates.
"The increased costs will add approximately RM4.2 billion per annum to TNB’s gas cost and another RM1.4 billion to the coal cost. That’s a total RM5.6 billion," he said adding that this will reduce the companies profits from this year.
Che Khalib also disclosed that TNB will initiate negotiations with Independent Power Producers (IPPs) to find ways to help the consumers together.
"From the preliminary feedback I have received, they are ready to discuss to find solutions together," he added.
Also present at the press conference was TNB chairperson Leo Moggie.
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