Going To Raise Petrol Price and Electricity Tarif Again???

Issues and concern now at the corner again. I think the petrol price raise up and electricity tariff revision is come closer to our shoulder again. So, what will our living to be? Price hike of daily used goods already burden majority of people now. People in middle income earning also suffering especially from private sectors.

Do we still support current ruler or make a choice to make drastic change? Our selection will come  sooner. What will your choice be? Mine, want to make a change for a betterment future for my children.

Thestar: Saturday May 5, 2012

Solving oil and gas subsidy problem

By JOHN LOH
johnloh@thestar.com.my

THE argument against subsidising the country's oil and gas has been made time and again, yet the decision to do away with it remains one that no government would be glad to make in a hurry.
One need only point to the recent examples of mass riots in Nigeria and Indonesia, where thousands took to the streets after their governments removed subsidies for fuel, as evidence that no matter the logic, this is hugely unpopular.
Nonetheless, it is a situation the Government has to resolve, and soon, as demand for gas heats up in the region.
Already, China and India account for 25% of Asia Pacific's gas sales, and they have been aggressively raising their liquefied natural gas (LNG) imports in recent years.

International Gas Union (IGU) president Datuk Abdul Rahim Hashim says China wants to increase the amount of gas in its energy mix to 8% from 3% currently, which may sound minuscule in percentage terms, but is a tall order in absolute figures.
The IGU, an international umbrella body for gas associations, has predicted that Asean will face tough competition from its East Asian neighbours to secure LNG cargoes from the same suppliers.
If the Government is to reduce the billions of ringgit spent each year on subsidies, it must find ways to remove them, Abdul Rahim says.
According to him, artificially cheap gas feeds into a vicious cycle: it discourages investment, which means less money is spent on looking for new gas fields; end users are blunted to the true cost and consume more energy than they need; and the Government has to continue keeping prices low to preserve socio-political stability.
Abdul Rahim brings up an International Energy Agency report which found that a whopping US$400bil went into subsidies for oil and gas around the world last year.
“What sort of benefit has it provided?” he asks. “The transportation sector took most of it, and there was no multiplier impact from all this spending.”
The fragility of the Malaysia's energy system, he opines, is a problem as well. “We have a system whereby one end is fixed (electricity tariffs), and generators are looking for the cheapest source of fuel. Gas is the cheapest of the lot, and since generators tend to use the cheapest resource available, that has pushed the system to the limit.
“The system in Peninsular Malaysia is such that there is a specific capacity for it (energy production), and once you hit the limit, then any disruption, whether to the supply or to the value chain, will impact the users.”
The persistent shortage of the country's gas supplies came to a head last year when Tenaga Nasional Bhd (TNB), in dire straits, sought the help of the Government and Petronas to pay for the RM3.5bil it had incurred since 2010 to buy costly gas replacements such as oil and distillates.
Petronas had to shut down its gas facilities for overdue maintenance, which caused a supply disruption to TNB's electricity generation. TNB is more dependent on gas than other fuel sources as it makes up 60% of its energy mix, followed by coal, hydro power and others.
While Petronas has since restored some supplies to TNB, the national power company received less than 1000mmscfd (million standard cubic feet per day) during the first half of the company's third quarter ending May 31, due to outages at Petronas' facilities. This is short of the 1,250 mmscfd it had agreed to deliver.

Because of subsidies, Malaysia's end-user gas prices are the lowest in South-East Asia (see chart). Since May 1997, Petronas has had to foot RM136.5bil to subsidise both the power and non-power sectors, which is money the Government could have channelled to more productive industries.
In its financial year 2011 alone, subsidies cost the country RM20.1bil. What's more, it did not meet the Economic Planning Unit's target to raise gas prices to the power sector by RM3 per mmbtu every six months and reach market parity by 2016.
The plan was to start the first rate hike in December, but that failed to materialise, and “now everyone is waiting for the one in June”, Abdul Rahim says.
The only solution, he adds, is to float gas at market prices, though critics have argued that will be detrimental to inflation.
“The current gas prices do not benefit the guys with the small cars and kapcai, but people who have two or three cars in their garage. You have to be specific with subsidies and not cover the whole spectrum of customers,” he contends.
On another note, Abdul Rahim is upbeat about the prospects for gas. “It is a fuel that is taken for granted. A lot of people say gas is transitionary, to fill the gap before renewable energy takes over. We believe gas will be there for a long, long time because of its availability,” he enthuses.
The total for both conventional and unconventional reserves like shale gas (natural gas trapped within shale formations) stood at 800 trillion cubic metres globally, says the engineer and former Petronas executive. In layman's terms, this can last another 250 years at the current consumption levels.
Abdul Rahim, who has held the IGU leadership since 2009, is also president of the Malaysian Gas Association.
Malaysia will cap its final year at the helm of the IGU by hosting the 25th World Gas Conference in Kuala Lumpur in June. IGU, which has 116 members across 77 countries, advocates for the inclusion of gas in energy production.
By way of its reserves, Abdul Rahim says Malaysia has 88 trillion cu ft of gas, or 40 years to go.
But the important thing for the country's energy longevity is diversity of sources, he quips, adding that renewable energy such as hydro have potential, although their cost is still quite high.
More notably, he believes nuclear energy should not be dismissed. “It should be an option. The unfortunate thing is that after Fukushima, things got derailed and public opinion has swayed to the other side.
“Malaysia has actually fulfilled all the International Atomic Energy Agency's requirements, which are extremely stringent,” he says.