Malaysian Energy Prices Set To Rise

Posted on 11. Jan, 2010 by Ross in Asia, Energy Prices

Malaysia is bracing itself for substantial energy prices rises, with many companies and industries making a deliberate push towards energy saving solutions in order to counter the possibility of rising cost overheads.

Presently, Malaysia’s tariff rates are the third lowest in the region after Vietnam and Indonesia, but a tariff review will be imminent if international prices of gas and coal rise, as seen in 2007 and the early part of 2008. Natural gas prices have surged by some 74% and coal prices by 17% since early November last year due to the stronger demand in winter.

South Korea and China have already endured record cold spells this winter, adding to fears that energy price rises will be higher than previously anticipated.

“Although there has been no Cabinet decision for now, Tenaga Nasional Bhd’s (TNB) electricity tariffs will nevertheless be reviewed again in January-February given the Government’s bi-annual energy review policy,” said AmResearch analyst Alex Goh.

Speculation over Malaysian energy price rises has led to companies investing in energy saving technology, with a 20% increase in customer orders for energy efficiency solutions over the last quarter of 2009. Businesses which acted fastest to protect profits this way included hotels and owners of commercial buildings that presently had hefty electricity bills.

Energy-efficient lighting, heating and air-conditioning solutions made up the majority of the energy saving projects which Malaysian companies sanctioned.

Electricity tariffs in Peninsular Malaysia were last adjusted on March 1 last year, reduced by an average of 3.7% following the 24% hike in July 2008.

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