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22nd July, 2008
KUALA LUMPUR: Perwaja Holdings Bhd has appealed to the government to revert the natural gas price to RM11.32 per mmBtu (million metric British thermal unit) from RM23.88 if it is used as feedstock only and not for burning purposes.
There are two uses for natural gas in the steel industry—as feedstock, or a component of making steel, and as fuel for burning pruposes.
Perwaja chief executive officer, Henry Pheng Chin Guan, said the group looked forward to a better pricing for natural gas used as feedstock and was willing to pay higher price for gas used as fuel.
Recently, the government announced that effective July 1 2008 until June 30 2009, those who used natural gas of more than 2 million cu ft would pay a new rate of RM23.88 per mmBtu from RM11.32.
These heavy users are steel millers, petrochemical producers and fertiliser plant operators. By 2018, all natural gas users will have to pay the international market rate.
The government has said natural gas is sold at around RM79 per mmBtu in the global market, and that the new rate was actually a 70 per cent discount with Petroliam Nasional Bhd absorbing the difference.
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