Malaysia tips gas, electricity price hike
Sunday, 2 December 2007
KUALA LUMPUR, Dec 1 (AFP): Malaysians must brace for gas and electricity price hikes, according to reports today, shortly after the government signalled further deeply unpopular fuel price increases.
Deputy Prime Minister Najib Razak said the government was weighing the impact on consumers as well as on utility giants like Tenaga Nasional (TNB), the New Straits Times reported.
"We do not want the people to be overburdened with the review of gas and petroleum prices. But at the same time, we are also mindful that any review should not undermine or arrest strategic companies like TNB," he said.
Najib, who is on a visit to Hong Kong, did not give any timeline but said gas and electricity prices would be reviewed together.
The New Straits Times said the increase was likely to be implemented early in the new year.
Malaysia's government has been preparing the electorate for bad news on power and fuel prices as it prepares the ground for elections.
The polls had been expected to be held in early 2008 but observers say Prime Minister Abdullah Ahmad Badawi is likely to distance them as much as possible from the price hikes, and instead hold them later in the year.
Abdullah said earlier this month that energy subsidies would have to be reduced, as Malaysia could no longer afford to spend 35 billion ringgit (10.5 billion dollars) in oil and gas subsidies each year.
"We need to restructure this subsidy," he said. "The subsidy should be given to those who need it."
Malaysia imposed its highest-ever fuel price rises in February 2006, citing the spiralling cost of crude oil, and pledged to use the cost savings to boost the country's substandard transport system.
Following the sharp hike, political and civil groups organised rare demonstrations in the streets of the capital Kuala Lumpur to condemn the decision, arguing it was unnecessary as Malaysia is a net exporter of oil.
The last electricity tariff hike came in June 2006, when the government approved a 12 per cent increase, the first in almost a decade.
Deputy Prime Minister Najib Razak said the government was weighing the impact on consumers as well as on utility giants like Tenaga Nasional (TNB), the New Straits Times reported.
"We do not want the people to be overburdened with the review of gas and petroleum prices. But at the same time, we are also mindful that any review should not undermine or arrest strategic companies like TNB," he said.
Najib, who is on a visit to Hong Kong, did not give any timeline but said gas and electricity prices would be reviewed together.
The New Straits Times said the increase was likely to be implemented early in the new year.
Malaysia's government has been preparing the electorate for bad news on power and fuel prices as it prepares the ground for elections.
The polls had been expected to be held in early 2008 but observers say Prime Minister Abdullah Ahmad Badawi is likely to distance them as much as possible from the price hikes, and instead hold them later in the year.
Abdullah said earlier this month that energy subsidies would have to be reduced, as Malaysia could no longer afford to spend 35 billion ringgit (10.5 billion dollars) in oil and gas subsidies each year.
"We need to restructure this subsidy," he said. "The subsidy should be given to those who need it."
Malaysia imposed its highest-ever fuel price rises in February 2006, citing the spiralling cost of crude oil, and pledged to use the cost savings to boost the country's substandard transport system.
Following the sharp hike, political and civil groups organised rare demonstrations in the streets of the capital Kuala Lumpur to condemn the decision, arguing it was unnecessary as Malaysia is a net exporter of oil.
The last electricity tariff hike came in June 2006, when the government approved a 12 per cent increase, the first in almost a decade.