THE cabinet has agreed to reduce the basic average tariff for the use of gas for the second regulatory period (RP2) starting from January 1, 2023 and ending December 31, 2025.

The setting of the gas facility charge by the government for each regulatory period is part of the country’s gas market incentive based regulation regulatory framework.

Economy Minister Rafizi Ramli said the new tariff covers four gas facilities: 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, and the adjustment of income and the average tariff that is the average basic tariff for RGTSU is unchanged at RM3.455/gigajoule (GJ)/day.

“There is no income adjustment for the period from January 1, 2023, to December 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 currently and there was no income adjustment for the period from January 1, 2023, to December 31, 2023.

Meanwhile, the average basic tariff for PGB also fell by 5.8% at a rate of RM1.063/GJ/day compared to the RM1.129/GJ/day it is now.

“The average tariff allowed for the period from January 1, 2023, to December 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 this period at the rate of RM1 .573/GJ/day. The average tariff allowed for the period January 1, 2023 to December 31, 2023 is RM1.535/GJ/day after adjusting for excess income of RM0.038/GJ/day,” he explained.

Rafizi said the proposed reduction in the average tariff is expected to provide reduce 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. – Bernama, December 23, 2022.