Govt urged to be more open in fixing electricity tariff

There have been growing calls for the government to reduce electricity tariffs to reflect the lower prices of material used for power production. (Facebook pic)

PETALING JAYA: Putrajaya should be more transparent in determining electricity prices, an investment analyst says amid calls on national power company Tenaga Nasional to reduce tariffs.

Phua Lee Kerk, chief strategist at Phillip Mutual Bhd, said this was because the price of coal and gas, the most important feeder stocks for the generation of electricity, had been on the downtrend.

“The government has to be more transparent when setting electricity tariffs so that the effects of lower production cost can be passed on to the consumer,” he told FMT.

He said consumers were questioning why tariffs remain the same despite the current deflation coupled with lower gas and coal prices.

The electricity tariff rate is currently 39.45 sen per kilowatt hour (kWh).

The tariff is set every six months by the Energy Commission.

Yesterday, TNB chairman Leo Moggie said electricity tariffs would not be reduced for the time being, despite growing calls for a reduction due to falling prices of fuel used in power generation.

The price of coal fell by more than 30% to US$79 (RM322.50) per tonne from US$118 (RM479) per tonne in July last year.

As for gas, the spot prices for May delivery dropped more than 60% to US$4.40 per one million British thermal unit (mmBtu), from US$11.81 per mmBtu in September last year.

The Energy Commission fixed the tariff at 39.45 per kWh last September on the assumption that international coal prices average at US$75 per tonne and gas at RM27.20 per mmBtu. - FMT