Why Are Malaysia Gas Prices Are So Different From Other Countries?


Dateline 2015-06-26, Establishment Post:

Malaysian Iron & Steel Industry Federation (MISIF) wants the government to maintain Malaysia gas subsidies (link below):

Steel makers oppose gas price hike, wants govt to step in

As anybody who follows the global natural gas industry will know, there are massive discrepancies in gas pricing across the world. Gas prices in the US have been sub-USD3 for many years, while prices in Europe have averaged around USD8-USD12. Asia? More like USD12. That is right, as much as four times higher, and that is after coming down from USD15-USD16 last year. Even with the price adjustment, nearly half the price of local gas is subsidised.

Part of these price differentials is due to multiple methods of pricing gas, while another part is the dominance of long term contracts, which essentially divorce the bulk of gas actually bought and sold from spot market prices.

 

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