Gas Malaysia ups natural gas tariff
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Gas Malaysia Bhd has announced a higher average effective natural gas tariff for the non-power sector in Peninsular Malaysia at RM32.92 per MMBtu, which is 0.7% higher than the current RM32.69 per MMBtu. The revision will be effective from Jan 1, 2019 to June 30, 2019.
The group told the stock exchange that the government has issued an instruction for the company to effect the natural gas tariff revision starting early next year.
The average base tariff will be set at RM32.69 per MMBtu.
Under the gas cost pass through (GCPT) mechanism, a surcharge of RM0.23 per MMBtu will apply to all tariff categories for the period beginning Jan 1 to June 30, 2019. This translates to an average effective tariff of RM32.92 per MMBtu.
However, for Category A (Residential), the effective tariff rate fell 0.34% to RM23.72 from RM23.80 per MMBtu.
Gas Malaysia said while the tariff revision has no material impact on its business operations, it is expected to contribute positively towards its financial position for the financial year ending Dec 31, 2019.
To note, the government has prescribed the Incentive-Based Regulation (IBR) framework which sets the base tariff for a regulatory period of three years from January 2017 and allows changes in the gas costs to be passed through via the GCPT mechanism every six months.
Gas Malaysia shares closed 0.74% or two sen lower at RM2.69 with 547,300 shares transacted.
Questions & Answers
Q.Which specific customers will see a reduction in their natural gas tariff?
Which specific customers will see a reduction in their natural gas tariff?
Customers in Category A, identified as Residential, will experience a decrease in their effective tariff rate. Their rate will fall by 0.34% to RM23.72 per MMBtu, down from RM23.80 per MMBtu.
Q.What is the expected financial impact of this tariff revision on Gas Malaysia's business?
What is the expected financial impact of this tariff revision on Gas Malaysia's business?
Gas Malaysia expects the tariff revision to have no material impact on its day-to-day business operations. However, it is projected to contribute positively to its financial position for the financial year ending December 31, 2019.
Q.What is the purpose of the Incentive-Based Regulation framework mentioned in the article?
What is the purpose of the Incentive-Based Regulation framework mentioned in the article?
The Incentive-Based Regulation framework sets the base tariff for a three-year regulatory period starting January 2017. It also allows gas cost changes to be passed through to customers every six months using the GCPT mechanism.
Q.How long will this new average effective natural gas tariff be in effect?
How long will this new average effective natural gas tariff be in effect?
The revised average effective natural gas tariff for the non-power sector in Peninsular Malaysia will be effective for a six-month period. It commences on January 1, 2019, and concludes on June 30, 2019.
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