KUALA LUMPUR: Medical glove manufacturers and exporters stand to lose RM47.2 million in foreign revenue over the next three months, resulting from the recent sudden and drastic gas tariff increase.
“Gas Malaysia's sudden spike in natural gas tariff had forced manufacturers to absorb the unanticipated cost increase to honour some RM5 billion orders secured before the announcement,” said Malaysian Rubber Glove Manufacturers Association (Margma) president Denis Low Jau Foo.
In a statement today, he lambasted Gas Malaysia Bhd for its bad habit of making sudden and drastic gas price hike instead of allowing adequate time for manufacturers to re-price their export products.
"It does not benefit Malaysia because importing nations gained on what could have been extra revenue for Malaysia's exports,” he said.
“If given sufficient lead time, such increased cost could have been passed on to the international buyers. It is not wise at all especially when Margma has, time and again, appealed to Gas Malaysia to give adequate lead time.
"Gas Malaysia has done a disservice to the medical glove exporters and to the country when the government is busy reviving our economy!” Low lamented.
The natural gas price hike increased from RM32.38 to RM34.12 per MMBtu is equivalent to a 5.37 per cent increase for Tariff Category F.
This, he highlighted, is too drastic and with just three days’ notice over a weekend, it is also too sudden for manufacturers and exporters.
The RM34.12 per MMBtu pricing which takes effect from July 15, 2019 is higher than the base tariff of RM32.74 per MMBtu previously announced in the road map on December 28, 2016.
Low estimated this natural gas price hike will lead to an increase in production cost of US$0.30 to US$0.80 per 1,000 pieces of nitrile gloves and about US$0.35 to US$0.85 for natural latex gloves.