Rising cost of fuel cited for new electricity tariff

The rising cost of fuel such as domestic gas, coal and liquefied natural gas are the main contributors to the review of the electricity tariff with effect from Jan 1. Energy, Green Technology and Water Minister Datuk Seri Dr Maximus Ongkili said price of fuel such as domestic gas increased from RM13.70/MMBtu to RM15.20/MMBtu; coal, from US$85/tonne to US$87.5/tonne and liquefied natural gas (LNG) imported at the market price of RM41.68/MMBtu.

"The components of these fuels have contributed 81.96 per cent or 4.09 sen/kWh of the overall tariff increase of 4.99 cents/kWh.

"Any change in the price of fuel will undoubtedly have a significant impact on the cost of electricity supply," he said during question time in the Dewan Rakyat, Thursday.

He was responding to a question from Datuk Othman Abdul (BN-Pendang) who wanted to know the rationale behind the ministry raising the electricity tariff when Tenaga Nasional Berhad (TNB) had announced a profit of RM1.73 billion.

Ongkili said that while the net profit for the financial year ending Aug 31 last year was RM4.12 billion, it was not enough to balance out the cost of power generation and distribution.

Some ways to reduce the cost of electricity, which in turn will reduce the increase in tariff rates, was through TNB's increased operational efficiency performance, he added.