Malaysian government and Petronas to share alternative fuel cost with Tenaga Nasional

Tenaga Nasional Bhd. said that the Malaysian government and Petronas will share the additional cost that the company incurred in the purchase of alternative fuel used to generate power in the midst of a gas shortage. The state-controlled company explained that under the fuel-cost sharing scheme, the government and state-owned oil and gas firm Petroliam Nasional Bhd (Petronas) will equally share with Tenaga Nasional the MYR3.07 billion (US$1.02 billion) that was incurred during the January to October period. Tenaga Nasional is in the brink of a “cash crunch” after suffering two consecutive quarters of losses because it has been using more expensive fuel oil and distillates to generate electricity. The company has been using alternative fuels imported from Singapore and Thailand, as well as fuel distillates, which cost five times more than gasoline. Tenaga Nasional posted a quarterly net loss of MYR453.9 million (US$150.3 million) for the quarter that ended on August 31, 2011. The disruption in the country’s gas supply is expected to continue till the latter half of 2012, when the regasification plant in Malaka comes online. (December 1, 2011)