Petronas chief executive officer Shamsul Azhar Abbas today called for a removal of gas subsidies, saying it is “detrimental” to the industry.
In his opening remarks at the World Gas Conference 2012, he said that only a liberalised gas market will provide impetus for investments.
“I believe that gas prices should be left to be determined by market forces.
“In the long term, the unsustainable arrangement of subsidising gas prices would prove detrimental to the industry, as it adds another layer of consideration to its own commercial viability,” he said.
In his opening remarks at the World Gas Conference 2012, he said that only a liberalised gas market will provide impetus for investments.
“I believe that gas prices should be left to be determined by market forces.
“In the long term, the unsustainable arrangement of subsidising gas prices would prove detrimental to the industry, as it adds another layer of consideration to its own commercial viability,” he said.
Shamsul added that doing away with subsidies also encourages transparency and competition.
It was reported that Petronas had lost RM133 billion in revenue due to gas subsidies to independent power producers from 1997 to March 2011.
On track to match market price in 2015
Meanwhile, in his keynote address to the more than 4000 international delegates, Prime Minister Najib Abdul Razak claimed Petronas’ confidence that his government is on track to reach its target of zero gas subsidy in December 2015, despite having frozen subsidy cut plans a year after introducing them in 2011.
“I am delighted to report that these reforms have so far created considerable confidence in the domestic gas industry, as we heard from Datuk Shamsul earlier,” he said.
He added that the government needs to embark on price reform wisely to ensure that “it is more readily accepted ny the wider population”.
This, he said, involves “generating a sufficient buffer of income growth” to enable the population to absorb higher energy prices.
It was reported that Petronas had lost RM133 billion in revenue due to gas subsidies to independent power producers from 1997 to March 2011.
On track to match market price in 2015
Meanwhile, in his keynote address to the more than 4000 international delegates, Prime Minister Najib Abdul Razak claimed Petronas’ confidence that his government is on track to reach its target of zero gas subsidy in December 2015, despite having frozen subsidy cut plans a year after introducing them in 2011.
“I am delighted to report that these reforms have so far created considerable confidence in the domestic gas industry, as we heard from Datuk Shamsul earlier,” he said.
He added that the government needs to embark on price reform wisely to ensure that “it is more readily accepted ny the wider population”.
This, he said, involves “generating a sufficient buffer of income growth” to enable the population to absorb higher energy prices.
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