FMM concerned over delay in distribution access arrangements

04 Dec 2019 / 20:21 H.

PETALING JAYA: The Federation of Malaysian Manufacturers (FMM) is concerned that the prolonged delay in finalising the distribution access arrangements may impede the planned gas market liberalisation.

“Currently, manufacturers have expressed grave concerns that the prolonged delay in finalising the distribution access arrangement and the one-sided gas supply agreement (GSA) by the incumbent supplier have made it difficult for gas customers to agree with the terms of the new GSA or explore supply negotiations with other gas suppliers,” it said in a statement today.

The association highlighted that the customers were not given the option to sign for a one-year contract, in addition to supply being terminated if the customer also procures from other suppliers.

“The supply agreement is also deemed ambiguous given the lack of clarity on the additional surcharges that customers are subjected to and no details on the calculation of the surcharges. In particular, customers are also exposed to onerous liquidated ascertained damages because of this one-sided agreement.”

The association advocated that any acts or terms of supply that could reduce or restrict competition in the gas supply market should be preempted to ensure protection of consumer interests in the process of liberalisation of the gas market.

It stressed that the timing for market liberalisation is important, ideally when the gas price is comparatively low, based on the current trend.

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