THE Sarawak Legislative Assembly recently passed the Distribution of Gas (Amendment) Bill 2023, which took the state's control of its oil and gas resources a step further.
The newly enforced legislation empowers state-owned Petroleum Sarawak Bhd or Petros to become a monopoly in the gas supply chain in Sarawak.
In rationalising the move, state Utility and Telecommunications Minister Datuk Seri Julaihi Narawi says the appointment of Petros as the "gas aggregator" ensures "the availability of gas for industries and consumers, and also to strengthen, improve and expand the existing gas distribution network and systems".
While the move is an obvious leg-up that the Sarawak government is extending to Petros, some controversy has arisen as to whether effectively creating a monopoly is necessarily the best way to develop the industry.
Little has been officially articulated as to how appointing Petros as the sole distributor for liquefied petroleum gas (LPG) benefits all those involved.
The lack of a grace period before the legislation took effect on Dec 1 compounds problems faced by existing gas distributors such as MyGaz Sdn Bhd, a subsidiary of Siam Gas of Thailand.
Its dealers have complained of unfairness in how the legislation has burdened them with extra costs in switching to Petros' LPG cylinders.
MyGaz was, until last month, controlling a third of the gas supply market in the state with the rest under Petros subsidiary, Petrosniaga.
Julaihi has rationalised making Petrosniaga the sole supplier thus: "Petrosniaga is a local company owned by Petros with 51 per cent equity and 49 per cent owned by Petronas Dagangan Bhd — 100 per cent owned by Malaysia — while MyGaz Sdn Bhd is a subsidiary of Siam Gas, which is a supplier of LPG from Thailand.
"We should be supportive of our Malaysian company."
Should supporting a Malaysian company be done by effectively nationalising an entire industry or should it be better left to market forces to decide?
Isn't the idea of healthy competition, with more than one player, persuasive in ensuring industry efficiency?
Perhaps an aggrieved party such as MyGaz can ask the Malaysia Competition Commission to ascertain if creating a gas monopoly by law serves the best and long-term interests of consumers or the state.
There is a fairly good argument for such sectors as electricity supply and distribution to be monopolies owing to the prohibitive capital costs involved in getting started.
Such an argument clearly does not apply to gas distribution, negating the necessity to legislate to create a gas distribution monopoly in Sarawak.
State assemblywoman Violet Yong has taken up the cause of MyGaz dealers and distributors, who felt shortchanged by the newly amended state gas law. She is adamant that they should not have to incur any costs in switching to Petrosniaga.
"Since the government wants to take back everything, then they should be responsible for this."
Yong should not just be looking into the narrow, immediate grievances of former MyGaz dealers and distributors.
It may be worth exploring if the law itself, passed by the overwhelming majority enjoyed by the Sarawak government in the state assembly, passes muster with the nation's anti-competition rules.
If it does not, it is Sarawak's gas consumers, not just some affected dealers and distributors, who may ultimately be hard done by.
The writer views developments in the nation, region and wider world from his vantage point in Kuching
The views expressed in this article are the author's own and do not necessarily reflect those of the New Straits Times