Concern over profitability of utilities following gas shortage

Dateline 2012-02-18:

As the authorities finalise their recommendations for the price of gas, analysts are concerned over the profitability of utility companies while Tenaga Nasional Bhd (TNB) is tackling its gas supply shortage.

In a report, OSK Research head of research Chris Eng said that previously, any gas price hike had been accompanied by a corresponding increase in electricity prices to compensate for the higher fuel costs.

“Do note that in Malaysia currently, all fuel costs are borne by TNB and the utility will only be able to maintain its profit margin by passing on any fuel cost increases to consumers via higher electricity prices,” he said.

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