The crude oil price is now close to US$50 per barrel. The price of natural gas has plunged since July 2008. Coal, which at one time was US$192/tonne, is now hovering around US$80/tonne.
Earlier when the prices were soaring, Tenaga Nasional hiked its electricity tariffs on 1 July 2008.
The electricity tariff hike was to cover the gas price increase and to partially offset the rise in coal prices, which had also gone up 170% since 2007, said the TNB chief back then.
Now that fuel prices have fallen, blog reader Desmond is wondering why TNB hasn’t reduced its rates.
When the fuel price went up, Tenaga said their cost had gone up and it hiked the electricity tariff.
Now petrol and gas prices have dropped and even fuel oil and transport costs, shipping charges for coal delivery, and the price of coal itself has gone down in the world markets but why is the Tenaga electricity tariff still so high when it should have gone down as well?
Something is not right here.
Some say the private power plant have already contracted to deliver power to Tenaga at a high price and even though the actual cost of raw materials, fuel and transport have dropped Tenaga is still bound by price agreed with the independent power producers.
In the end, it is the end consumers who are at the mercy of these private firms and Tenaga itself, which has not reduced the charges of electricity.
This is daylight exploitation of the consumers and the rakyat.
Maybe someone in the Tenaga can shed some light on this and provide the reaso. Better still, provide proof that something is wrong somewhere by revealing some inside information to enable the rakyat and end consumers to obtain cheaper electricity.
In my opinion, the tariff should have come down a long time ago since petrol, fuel, transport and raw material costs have all plunged.
Got to feed crony IPPs that’s why. The subsidies these are getting from Petronas is huge! Remember seeing YTL, Genting, Syed Mohtar and Maxis/ Astro being so bullish despite the down turn? Now you know why.
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To know the real story, it`d be necessary to go into the TNB purchase contracts, they may have locked-in forward coal purchases then in anticipation of prices going higher.
They could try contract wash-outs now, but details would be needed on those contracts.
The next ? would be on TNB`s hedging policies. How effective has it been.
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A loaf of wholewheat bread is still RM3! Food still so expensive. Minister said prices supposed to come down in 2009, where got?
My family is middle class and we are already feeling the pinch, how about those with lower level income? Some plantation workers make like RM3 a day. I wonder if their children are eating at least three good meals a day.
While all the greedy bloated UMNO choirboys go around singing “No recession! No recession!” ordinary Malaysians are suffering the most.
Najib, spend one day working and living as a palm oil plantation worker — maybe then you will wake up to the real world for many lower income Malaysians. …
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Even in KT, they are moving around with outriders, helicopters and exclusive cars. What do they care about the people when they are having a good life. We are scratching our heads at the end of each month on how to budget ourselves and make ends meet at home. They only way is to wash UMNO/BN regime out. Enough is enough. Lower prices, all bygones and forgotten.
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I had adopted solar power lighting and managed to reduce my electrical bill 20%.
I would recomend go to: http://www.scorigin.com
Take a look and make a changes!
Don’t depend too much on TNB.
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and we are still subsiding the government for the petrol. and we are so called the petrol-export nation. wth.
“malaysia boleh” when the government has no shame.
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The whole issue of market prices, hedging prices, and “CRONY” prices have weaved a complex web here.
During the spiralling price regime, I suspect that TNB was pushed to signing long term deals with the suppliers, at prices which can be considered ridiculous at this time. So while the market prices could be USDx, TNB could be paying USD 2x or even 3x. You can decide who screwed up!
On the other issue of Dr M coming up with a brilliant suggestion of boycotting US made goods. I wonder how? These days we are buying Industrial equipment from the US, and if we don’t buy these, no way, our Penang MNCs can continue to grow with the latest technology. Wonder if he is aware we are buying Silicon Wafer from Israel which is diverted thru’ Ireland before being sent here.
By boycotting Coke, or Pepsi, we are only going to get our Malaysian workers in these plants retrenched. STUPID!
Go to HELL! We need our jobs!
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The same situation exists in Europe. The excuse given by the power companies here is that they are basing their tariffs on the oil price of summer 2008!!!!
That’s the excuse given and while everyone is grumbling about it, the govt has not made it into a debatable issue. :p In total, power tariffs here has risen by 9-15% depending on the power company one is subscribed to.
I bet the same excuse is used everywhere!
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It is to cover the increase in the Tenaga management’s bonus. Pat each others back for the increase in tariff and profit.
The same with the toll issue. Billions are taken from rakyat, companies not taxed and profit shared with ‘government’. Who is taking all these ‘profits’?
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my dad is in to finance business, and i am seeing almost 50 people daily suffering from the current economic crisis. things are getting really bad.. haiz.. i feel so sad.. but when can we do to help and stabilize things anil, crime rate is increasing rapidly, do list a bit on how we as Malaysians can play a role on cushioning the impact with our money rather than wasting money by travelling all the way to TERENGGANU, AND BRING DOWN THE GOVERNMENT. (CAN THE POLICE BE TRUSTED?) haiz, GOD SAVE MALAYSIA, I CAN IMAGINE THE SITUATION IN PALESTINE, I CANT WAIT FOR 20TH JANUARY, HIDUP OBAMA.
ITS HIGH TIME, WE FOLLOW SUIT LIKE THAILAND…IF THAILAND CAN CHANGE 3 PRIME MINISTERS IN 3 MONTHS, SO AS MALAYSIA BOLEH MY FRIENDS, IT ALL STARTS WITHIN US.
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we are middleclass and seeing the price of food go up it’s quite disheartening. the jump from elec tarriffs was ridiculous 30%! yeesh..
how to survive like dis..
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Aside from the vile taste of broken promises and empty words, I wonder what will happen should (when?) TNB reports a heftyprofit margin for this quarter/helf/year?
Will the government and in particular the minister directly responsible question the factors and reasons tendered by TNB for the profits?
Scratching my head, I seem to recall how many years ago Telekom’s reported profit shot up after the a “tariff rebalancing exercise” and wondering how such a rebalancing exercise always works wonders for the company doing the rebalancing but not for the consumers.
Ditto for various privatised services and utilities where prices shot up or price/tariff structures were revamped in favour of the companies, and again, the profits shot up.
My economics teacher in school (many, many years ago) stressed how certain service and utilities have to reamin in the public sector because such necessities are not meant to be profit-driven businesses. Was my teacher wrong?
Will there be pats on the backs of the top management of those privatised companies every time they present annual reports?
Pats, which must, of course be backed by BIG FAT cheques for salaries,increases in salaries,perks and entitlements?
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Today the mamak stall’s mee goreng biasa has increased RM0.50 from RM3.00 to RM3.50… WTH
Do you really wonder TNB is making profits or losing money when they increase the tariff?? Or the increase is only for bonuses to the boss, CEO??
Wasn’t that they applied for salary increase for the CEO back then when the petrol price hike?? anybody can explain to the Malaysian that suffered for the stupid and improper price hike??
Who is going to analysis and review the stupid lame duck price hike??
He/It/Them totally screwed up the country at their pleasure, and the suffer of middle/lower class citizens!!
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TNB and the Independent Power Producers are locked in a dance involving the most incredible and largest cases of crony capitalism in the country. The IPPs are guaranteed their profits, regardless of their power generation costs. TNB just passes the cost to the consumer.
Next time your read about YTL Power and other IPPs humungous profits, remember, you, me, and all the other consumers are paying for it.
On top of that, the high cost of power is impacting the country’s industrial competitivenes. Other countries are already enjoying the reduction in electricity power generating costs, perhaps the one true silver lining in this current economic slowdown.
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The stupid management, cannot even do a proper job renegotiating with the IPPs and dared to ask for a 100% salary increment. Useless bum, parasite, should be sacked long time ago.
With morons up there , the only thing they know what to do is to pass on their high cost to consumers
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I just posted something about this on Malaysia Today. Some links.
http://thestar.com.my/news/story.asp?file=/2008/12/12/nation/2788473&sec=nation
http://biz.thestar.com.my/news/story.asp?file=/2008/12/15/business/2797700&sec=business
http://www.jeffooi.com/Ani_%20TNB%20got%20a%20raw%20deal_060606.pdf
http://iis-db.stanford.edu/pubs/20956/Malaysia_IPP.pdf
The situation as I understand it is as follows. (There may be errors in the details.)
TNB is required to buy power from IPPs (Independent Power Producers) at a fixed rate, which is much higher than it ought to be. The result is twofold.
Therefore every Tom, Dick and Harry who was tuppence to invest has set up his own IPP to sell power to TNB at these exorbitant rates.
TNB passes on the cost to us and as a result we are paying much more for our electricity than we should be.
We are ALSO paying more because we are producing something like 50% more power than we can use and TNB is forced to buy the surplus.
All of this so far is not too surprising. However, I’m surprised that nobody has commented so far on the environmental cost of all of this.
The fact that we are producing more electricity than we can use means that we are almost certainly dumping all the ‘extra’ electricity into the atmosphere as heat and contributing to global warming as electricity is virtually impossible to store. I wonder that international environmental groups have not caught hold of this issue.
It also means that the environmental issues around electricity in this country are totally mismanaged. I seem to remember reading somewhere that there are places where we could still build dams and get hydroelectric power. Granted that the environmental impact of the dams would have to be studied, but the sensible thing might be to shut down most of the IPPs and move to cleaner power. (It’s also a crying shame that solar power more in use here.)
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What are the wakil rakyay doing? Or are they all wakil bisness? The people in power seem to forget they are civil servants. Yes servants to us the rakyat. You serve me and my needs. Thus you are called the goverment of the people for the people not Business. Its not only Tenaga, but everything else ; Plus, Penang bridge and Indah water, Syabas etc.
Yes something is very wrong with this picture. lob sided agreement?
Why? Or I forgot you guys are wakil bisness not wakil rakyat.
Sorry my bad.
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Tenage’ net profit down from RM4.1 billion for FY07 to RM2.8 billion for FY08. Image without the price hike, Tenaga probably in red now. Face with the problem of decreasing demand over gloomy economy outlook, the weakening of ringgit that affect its foreign debt , the uncertainty of fuel and coal prices, the continuing burden of IPPs following the suspension of PPA renegotiations , the large amount of bonuses paid to the CEO which fail to perform, you really expect Tenaga to reduce the power tariff? Mind you, Tenaga actually plan to ask for another price hike in July this year, which might not materialize due to present political uncertainty.
Make sure you guys continue to send negative signal to the BN government or else you will get another price hike coming July this year.
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In that case, I think I will look for alternative energy like solar and wind.
Just give Solar Cell Origin a call, and plan to buy some solar panel to power my house.
Better do something instead at TNB’s mercy!
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Dear Bread Lover.
Government said in 2009 everything will come down. Yes, maybe end of 2009? Get it, huh???
What government promise will come to pass, but when????? That is why they are called ‘BN’ or in simple lingo – ‘Barang Naik’ and/or ‘BeeNd’, got it?
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Thanks for the tip!
I had ordered two solar spotlight from SC Origin.
Looking forward to cut my dependant on TNB
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When I was working in London, one of the most expensive cities to live in, my electric bill, with maximum usage, was only £20 per month. I was earning around £2000 a month.
This £20, without conversion, can be likened to RM20.
When I returned to Malaysia, my electric bill was RM300. My gaji was RM2000.
So, I can assure you, Malaysia is a more expensive city than London!
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Tenaga will not reduce the electrical tariff even the world oil and gas price had drop becuase during the peak time (oil US$140 per barrel), Tenaga is purchasing gas from Petronas at a subsidize price (May be even lower than anyone can be expected). Therefore, just be prepared to pay high electrical bill! It will not go down.
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