KUALA LUMPUR (Nov 18): Petroliam Nasional Bhd (Petronas) subsidises 50 sen for each litre of compressed natural gas (CNG) sold, Minister in the Prime Minister's Department Datuk Seri Abdul Wahid Omar said.
 
Abdul Wahid said although the government raised the price of CNG to RM1.05 on Sept 20, from 68 sen, the hike had not reached market prices, as Petronas subsidised the fuel.

Abdul Wahid, who said this in a written reply to Parliament today, explained the selling price of 68 sen per litre, fixed 10 years ago, was below Petronas' production cost.

Abdul Wahid was replying to a question by Petaling Jaya Selatan MP, Hee Loy Sian. Hee had earlier asked the government to state the rationale for raising CNG prices, which led to higher operating cost for taxi operators.

Hee said higher cost had affected taxi drivers' income.

Abdul Wahid said the recent CNG price review was because Petronas had borne cumulative losses of RM3 billion from 2005 to 2014, or RM200 million a year.

'The losses borne by Petronas in the CNG business has increased in tandem with the increase of vehicles using CNG, especially public vehicles, such as bus and taxi.

"The cost of CNG is estimated to [have] accounted for 22% of total cost for taxi operators. With the increase in taxi fare, the issue of CNG price hike does not arise," Abdul Wahid said.

He noted that in 2014, a total of 56,945 vehicles were using CNG. Of the total, 55,135 or 96.8% were taxis.

Looking ahead, Abdul Wahid said it was important to create a bigger market for CNG, which would be beneficial to more users.

"The oil subsidy rationalisation and the review of the selling price of CNG are important in ensuring continuous supply of CNG, as well as to encourage other suppliers, other than Petronas, to participate as new players in the future.

"This (CNG) can reduce environmental pollution. The bigger market will encourage more usage of CNG to replace petrol and diesel, as CNG is cleaner than petrol and diesel, he said.