Wednesday, January 21, 2009

MCA welcomes move to review energy tariffs

MCA welcomes the Cabinet’s move for a speedy review of gas prices of the power sector. Energy, Water and Communications Minister YB Dato’ Shaziman Abu Mansor said that the Economic Planning Unit (EPU) would conduct a review before proposing the new gas price to his ministry, upon which his ministry would prepare an electricity tariff structure that would be streamlined with the new gas rate.

MCA Spokesperson Sdr Lee Wei Kiat welcomes the move by the government to reduce the power rates of the energy industry. “It shows the government is sensitive to the needs of the rakyat whereby with lower electricity tariffs, the costs of production are automatically reduced, thus resulting in prices of consumer goods and services dropping. The Barisan Nasional government is a caring government which always aims to alleviate the burden of the rakyat.”

“Such a reduction in energy prices is particularly warranted now when global demand has decreased significantly in view of the global economic crisis effected by the mellowing of the American economy. The higher electricity rates direly affect profit margins which could cause losses resulting with companies downsizing.”

Wei Kiat also advised the various retailers and service providers to cut the prices of their goods and services and to refrain from being focused with making excess profit since production and operations costs would be lower when electricity prices decline.

The head of the MCA Information and Communication Bureau also suggested that the government sets an auto floating mechanism to be implemented on power producers whereby the energy prices should follow according to global market demands. “MCA takes cognizance that public interest comes first. Our party’s stand is that there should be liberalizing of the economic sectors and an energy prices should be adjustable according to the global circumstance.”

“An auto floating mechanism in power rates will optimise prices for manufacturers, retailers, goods and service providers. Households will definitely benefit with lower electricity bills as it means lower expenses and a better purchasing capacity. It has always been MCA’s stand that medium and lower income groups must be prioritized. Meanwhile, the government may monitor the mechanism in an open and transparent manner.”