“If the RM19 billion profits forgone by Petronas annually to assist the IPPs and TNB is not a form of subsidy then what is the correct term to describe this loss?
“Power generated by IPPs meets about 60 per cent of the country’s electricity requirement while TNB the remaining 40 per cent, indicating that it is IPPs that benefit most from this RM19 billon,” DAP secretary-general Lim Guan Eng said in a statement today.
Lim’s remarks were in response to Energy, Green Technology and Water Minister Datuk Seri Peter Chin’s statement yesterday. The minister had said that it is untrue that IPPs enjoyed RM19 billion worth of gas subsidies from the government, and that the amount was merely the profit that Petronas had to forgo for selling gas below the market price.
Lim said that he was shocked by Chin’s “self-delusion” and said that the matter could be solved if Petronas is allowed to sell gas at market prices.
“The real question that Peter Chin and Barisan Nasional (BN) should answer is why the gas tariffs sold to IPPs cannot be increased when the price of sugar, diesel and petrol sold to the general public and ordinary Malaysians can be increased following the reduction of subsidies?
“Any failure by BN to insist that the IPPs must pay gas tariffs at market prices and stop price rises beginning in June 2011, will only show that ordinary people are targeted by BN to bear the full burden of price rises,” said the Penang chief minister.
He said that if Pakatan Rakyat (PR) assumed federal power, it would make sure that gas tariffs are sold at market prices.
Deputy Prime Minister Tan Sri Muhyiddin Yassin has said the government expects the subsidy burden to double from RM10.32 billion to RM20.58 billion this year.
Prime Minister Datuk Seri Najib Razak also said fuel subsidies were “like opium” to the Malaysian economy and would have to be gradually slashed as the initial bill of RM11 billion had soared to RM18 billion for the year due to escalating crude oil prices.
But the government announced today that it will not increase the price of RON95 petrol, diesel and liquefied petroleum gas (LPG) for now.
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