KUALA LUMPUR:'' Petroliam Nasional Bhd (Petronas) will need to rely more on gas imports in the future to ensure the nation's security of gas supply, but cautions about the overreliance on subsidies to keep the prices at current levels.
Its chief executive officer Datuk Shamsul Azhar Abbas said on Friday, Aug 26 the increased dependence on imported gas would take up a significant portion of it capital expenditure which it had previously budgeted for. It had earlier reported it would invest up to RM300 million as capital expenditure.
Speaking at the national oil corporation's first quarter earnings for the period ended June 30, he said there was an increased pressure on the supply of gas because it had been maintained as a cheap commodity for the country.
'Subsidies for gas were first introduced in 1997 during the Asian Financial Crisis, and developments in the market had since kept the subsidies ongoing. Gas is relatively cheap to coal and other alternatives, and this has exponentially pushed up demand more than it should have gone up,' Shamsul said
Any disruption in supply, however minute, was bound to create a massive impact, because of the strain on the supply of gas, he said.
Shamsul said it was crucial for the government to gradually remove gas subsidies, in order to ease the demand for gas.
'The bottomline is that we will have to face the reality of the situation. Most of the domestic needs for gas will be met by importing gas at market prices, and (simultaneously) subsidies for gas will gradually be withdrawn,' he said.
Its chief executive officer Datuk Shamsul Azhar Abbas said on Friday, Aug 26 the increased dependence on imported gas would take up a significant portion of it capital expenditure which it had previously budgeted for. It had earlier reported it would invest up to RM300 million as capital expenditure.
Speaking at the national oil corporation's first quarter earnings for the period ended June 30, he said there was an increased pressure on the supply of gas because it had been maintained as a cheap commodity for the country.
'Subsidies for gas were first introduced in 1997 during the Asian Financial Crisis, and developments in the market had since kept the subsidies ongoing. Gas is relatively cheap to coal and other alternatives, and this has exponentially pushed up demand more than it should have gone up,' Shamsul said
Any disruption in supply, however minute, was bound to create a massive impact, because of the strain on the supply of gas, he said.
Shamsul said it was crucial for the government to gradually remove gas subsidies, in order to ease the demand for gas.
'The bottomline is that we will have to face the reality of the situation. Most of the domestic needs for gas will be met by importing gas at market prices, and (simultaneously) subsidies for gas will gradually be withdrawn,' he said.
No comments:
Post a Comment