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Power rates can be 17% cheaper

LABIS: The Barisan Nasional government must reduce electricity rates by at least 17% to prove that it is not enriching its cronies at the expense of ordinary citizens, Petaling Jaya Utara MP Tony Pua said today.
“BN has long chosen to abandon the rakyat in the interest of its cronies” by giving independent power producers (IPPs)  RM6.2 billion to RM8.1 billion a year in annual gas subsidies over the past five years,” he told voters here as campaigning for the Tenang by-election heated up.
“These subsidies allow the IPPs to make billions in additional profits.”
Pua rejected the argument often given by “these BN cronies” that the subsidies were passed on to consumers.
He compared Malaysian rates to those of Thailand. In both countries, natural gas makes up 70% of the fuel used for power generation. Because of the subsidies, the price of natural gas to Malaysian IPPs is 53.7% cheaper than the rate paid by their Thai counterparts. However, Malaysian consumers get their electricity at a rate only 8% cheaper.

Given that fuel represents 40% of the costs to a typical power producer, Pua calculated, the appropriate electricity tariff in Malaysia should be at least 17% cheaper than the current rate.
“The fact that the BN government has decided to reduce subsidies for basic goods but has steadfastly refused to restructure the subsidies for the IPPs proves that BN does not have the interest of the rakyat at heart,” he said.
Worse still, he added, the government’s Performance Management and Delivery Unit (Pemandu) had proposed that electricity rates be increased every six months.
He also said that lopsided privatisation deals had hiked up water prices in Johor by up to 63%.
“The Tenang electorate must take this one-in-a-lifetime opportunity to take a stand and express Malaysians’ frustration with the intolerable and artificially inflated prices for basic goods and services,” he said.

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