PUTRAJAYA (Dec 23): The government has decided to reduce tariff for gas facility charges for the regasification terminal owned by Pengerang LNG (Two) Sdn Bhd and gas distribution pipeline owned by Petronas Gas Bhd between Jan 1, 2023 and Dec 31, 2023, the first year under the Second Regulatory Period (RP2).
The average base tariff for the Pengerang facilities will be reduced by 9.2% to RM3.165 per gigajoule per day from RM3.485 per gigajoule per day in RP1, said Economy Minister Rafizi Ramli at a press conference on Friday (Dec 23).
The average base tariff for Petronas Gas' distribution pipeline will be reduced by 5.8% to RM1.063 per gigajoule per day, from RM1.129 per gigajoule per day.
Rafizi said the Cabinet has also decided to maintain the average base tariff of RM3.455 per gigajoule per day for another regasification facility at Sungai Udang owned by Regas Terminal (Sg Udang) Sdn Bhd.
For the gas distribution pipeline owned by Gas Malaysia Distribution Sdn Bhd, Rafizi said the average base tariff will also be kept at RM1.573 per gigajoule per day in the first year of RP2.
Rafizi gave his assurance that the latest rates have taken into consideration all reinvestments, rates of return, capital and operating expenditure requirements by the facility owners.
"Basically, everything is covered, the regulatory framework ensures there is enough money and cash, financially it is sustainable. On the side of facility owners, it is in their best interest that everything is okay, because the higher the demand, the more volume is passing through," he said.
"When regulators set a lower expected return for the facility owners, it is more to balance and incentivise them to focus on the volume. Regulatory-wise, we want to ensure the robustness of the whole model, which also depends on volume. The slightly lower tariff, they can make up with the higher volume," he explained.