Monday, December 16

FMM seeks clarity on gas market liberalisation

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KUALA LUMPUR: Federation of Malaysian Manufacturers (FMM) is seeking clarity from the relevant authorities on the government’s plan to liberalise the gas market.

Its president Tan Sri Soh Thian Lai said FMM was concerned that prolonged delay in finalising distribution access arrangement might impede the planned gas market liberalisation.

“Industrial gas users have been looking forward to explore competitive gas prices with the entry of more gas suppliers via the third party access mechanism.

“However, distribution access arrangement which covers the last mile connectivity has yet to be finalised as the year end approaches.

“FMM strongly feels that the timing for market liberalisation is important, ideally when the gas price is comparatively low, based on the current trend,” he said.

He said manufacturers had lamented that the prolonged delay in finalising the distribution access arrangement and one-sided gas supply agreement (GSA) by the incumbent supplier made it difficult for gas customers to agree with the terms of the new GSA or explore supply negotiations with other gas suppliers.

“Among the grievances highlighted was that customers were not given the option to sign for a one year contract, in addition to supply being terminated if the customer also procures from other suppliers,” he said in a statement yesterday.

Soh added that the supply agreement was also deemed ambiguous given the lack of clarity on the additional surcharges that customers were subjected to and zero details on the calculation of the surcharges.

“In particular, customers are also exposed to onerous liquidated ascertained damages because of this one-sided agreement,” he said.

He reinforced that the transition from a monopolistic to open market must be done in an equitable and transparent manner for all stakeholders involved with the aim to ensure fair and competitive market practices to the benefit of the end users.

“Any acts or terms of supply that could reduce or restrict competition in the gas supply market should be pre-empted to ensure protection of consumer interests in this process of liberalisation towards establishing a fair and efficient market,” he said. — Bernama