PETALING JAYA: The current declining gas prices are expected to have a mixed impact on utility companies.
While the movement of gas prices has a neutral impact in the longer run given the regulated framework, the current declining gas price trend has a positive impact on Petronas Gas Bhd
in the immediate term, according to Kenanga Research.
This is because low gas prices lead to lower internal gas consumption (input cost) for its regulated business as well as non-regulated utilities segment, it added.
“The utilities segment uses gas as fuel to generate and supply power, stream and industrial gases to industries. However, weaker gas prices work against Gas Malaysia Bhd’s non-regulated retail margins, which are calculated based on a fixed percentage on the gas selling price.
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