Petronas WILL NOT continue to sell subsidised gas to TNB

(My Sinchew) – Petrolium Nasional Bhd (Petronas) has reiterated that it will not continue selling subsidised gas to Tenaga Nasional Bhd (TNB) for electricity generation this year.

 

Its president and chief executive, Datuk Shamsul Azhar Abbas said the offer was supposed to be a “one-off” affair and the government should not pay for any subsidy on gas.

“Never had we mentioned in the past that its going to be continuous handout to TNB…It was supposed to be one-off, because we pity them as they don’t have enough cash at that time.

“As a member of the economic council, we have volunteered to help them out and the government has also volunteered to play its part as well,” he told reporters after announcing Petronas’ 2011 financial performance here, today.

Currently, Petronas still waiting to get feedback from Putrajaya on its offer to foot a third of the cost to supply gas to TNB in order to help the consumers.

Shamsul Azhar said that for every RM3.00 subsidy, it would cost the group some RM1.7 billion.

“We sat down with three ministers three weeks ago and we’ve basically proposed a review of the formula, which takes into account domestic sensitivities.

“So, now it’s up to them to bring it up to the Economic Council,” he said.

Petronas currently provides subsidies of up to RM20 billion per year to the power industry in the form of natural gas at rates below market prices.

The company disclosed today that it had paid RM108.5 billion in subsidies for TNB since 1997, including RM3.9 billion for the three quarters ended Dec 31, 2011.