The Incentive Based Regulation (IBR) was introduced in 2014 as a modernised electricity tariff framework for Malaysia’s energy industry. (Petronas Gas Berhad pic)
PETALING JAYA: The Cabinet has agreed to reduce the basic average tariff for the use of gas facilities to be paid by gas users for the second regulatory period (RP2) starting from Jan 1, 2023 to Dec 31, 2025.
The setting of the gas facility charge by the government for each regulatory period is part of the country’s gas market regulatory framework under the Incentive Based Regulation (IBR) framework.
Economy Minister Rafizi Ramli said the new tariff for gas facilities for RP2 involves four gas facilities which are the regasification terminal owned by Regas Terminal (Sg Udang) Sdn Bhd (RGTSU), the regasification terminal owned by Pengerang LNG (Two) Sdn Bhd (RGTP), the transmission pipeline owned by Petronas Gas Bhd (PGB), and the distribution pipeline owned by Gas Malaysia Distribution Sdn Bhd (GMD).
“The setting of the average tariff for gas facilities for RP2, and the adjustment of income and the average tariff allowed for that period that is the average basic tariff for RGTSU remains the same as the RP1 period at the rate of RM3.455/gigajoule (GJ)/day.
“And there is no income adjustment for the period from Jan 1, 2023 to Dec 31, 2023,” he said in a statement today.
Rafizi also said the average basic tariff for RGTP dropped by 9.2% at a rate of RM3.165/GJ/day compared to RM3.485/GJ/day in the RP1 period, and there is no income adjustment for the period from Jan 1, 2023 to Dec 31, 2023.
Meanwhile, the average basic tariff for PGB also fell by 5.8% at a rate of RM1.063/GJ/day compared to RM1.129/GJ/day for the RP1 period.
“The average tariff allowed for the period from Jan 1, 2023 to Dec 31, 2023 is RM1.061/GJ/day after adjusting the excess income of RM0.002/GJ/day.
“The average basic tariff for GMD remains as it was during the RP1 period at the rate of RM1 .573/GJ/day. The average tariff allowed for the period Jan 1, 2023 to Dec 31, 2023 is RM1.535/GJ/day after adjusting for excess income of RM0.038/GJ/day,” he explained.
Rafizi said the reduction in the average tariff of gas facilities for the RP2 period is expected to provide savings in terms of energy costs to the industry.
“It depends on the volume of gas consumption, the reduction in the average tariff of gas facilities is projected to translate into savings of between RM5.5 million and RM33.2 million for 2023.
“For the distribution segment according to user category whether residential, commercial or industrial, savings are between RM4,000 and RM55.9 million for 2023,” he added.
The IBR was introduced in Malaysia in 2014 as a modernised electricity tariff framework for Malaysia’s energy industry. It was championed as a way to ensure a structured and transparent operational environment that promotes efficiency in every link of the supply chain. The stated goal is to deliver a secure, sustainable, and affordable electricity supply for consumers.
The IBR framework also aims to provide a clear, structured pricing system for customers. While costs associated with electricity production may change frequently, that uncertainty in pricing should not be deflected to consumers.
