No reason to revise electricity tariff in Sabah

By Melanie Chia

Electricity supplies is a utility, which in most countries, is the responsibility of the government. It is a necessity in this modern day society. The government of the day therefore cannot devolve itself of this responsibility, be it to ensure adequate and consistent supply or to ensure the affordability of this utility.

The just revised electrify tariff by Tenaga Nasional Berhad (TNB) starting on 1 June is only the beginning to further burden of rising costs to the people in the country. This would be so despite warning by the government authorities to the business communities that prices cannot be increased indiscriminately.

It is understood that where electricity is a component to the production costs, the rising of the electricity tariff inevitably increased the cost of production and therefore the costs of goods. It has also been reported that even hawkers in West Malaysia may consider price increase because of the increased burden of the utility to their income!

It is reported that the Managing Director of Sabah Electricity Sdn Bhd (SESB), Datuk Ir. Baharin Bin Din, had said that SESB is waiting for the government announcement on any increase in electricity tariff in Sabah.

Melanie Chia, SAPP Wanita Chief, also Luyang State Assemblywoman, said that there is no reason to revise electricity tariff in Sabah, more so when Sabah is a major producer of gas in the country.

The government had announced that the need to increase the electricity tariff is in line with the government's effort to rationalize energy prices in accordance with global market mechanisms and as part of the ongoing subsidy rationalization exercise.

It was reported that up to end of 2010, PETRONAS had extended about RM131.3 billion in gas subsidy to both the Power and Non-Power Sectors. It was also reported that shouldering the gas subsidy would limit PETONAS's ability to contribute in terms of dividends and corporate taxes.

"The government has repeatedly said that they need to review the subsidies because of the increase in the prices of oil and gas. But it has been reported that every time the price of oil and gas increased by US$1, there is an additional income of RM500million. Although the US$1 increase will increase the subsidy by RM350million, there is still a net excess of RM150million. So, where has this excess gone to?".

"By this calculation, the recent increases in the prices of oil and gas should have brought about a win-win situation to the government and the people of Malaysia. If the government has to cry foul each time the price increases, we need to ask the government where has the excess due to the higher prices of our natural resources gone to? Instead of a win-win accruing from our natural endowment, we are burdened with the eventuality of higher cost of living. Where is the logic?"

There is definitely a need to have greater accountability and transparency by PETRONAS. This is especially urgent for Sabah now that we have become the major producer of oil and gas in the country and we are not even represented in the Advisory Board of PETRONAS. Before our natural endowment in oil and gas is depleted, the Malaysian living in Sabah need to be assure that Sabah will benefit from the exploitation of the oil and gas here. Sabah and companies in Sabah should be direct beneficiaries from the Oil and Gas Industry development. On the same count, Melanie queried the siting of the proposed Refinery and Petrochemicals Integrated Development (RAPID) Complex in Johore when Johore has no gas or oil fields. The RAPID Complex is earmarked to produce chemicals and refine crude oil in the capacity of 300,000 barrels per day.

Melanie Chia is SAPP Wanita Chief and Assembywoman for Luyang