“Not one sen” of subsidies go to IPPs, oil companies, says Idris Jala

Independent power producers (IPPs) and oil companies are not subsidised by the government, said Minister in the Prime Minister's Department Datuk Seri Idris Jala (pic).

He said gas subsidies go to consumers of electricity, not IPPs.

"In the context of the recent 20-sen increase in the price per litre of diesel and RON95 petrol, it is wrong to say that this could be avoided if subsidies to IPPs and oil companies were removed.

"The simple, unvarnished truth is this – the government does not at all subsidise IPPs or oil companies – not one sen," he said in his blogpost entitled "The Truth about Subsidies".

He said it would be incorrect to believe that if subsidies to corporations were removed, it would allow subsidies to the public to continue. It would be mere over-simplification of subsidy rationalisation, he added.

"The government, through wholly-owned Petronas, subsidises between RM8 billion and RM12 billion annually in gas prices to all electricity generators – Tenaga Nasional Bhd and the IPPs. IPPs pass the gas cost to TNB," he said.

Idris said the savings from gas subsidies were passed to the consumers, both households and industries, through lower electricity tariffs and the country's electricity tariffs were among the lowest in the world. - Bernama