The Malaysian Iron and Steel Industry Federation is urging the Malaysian Government to reduce electricity and natural gas tariffs without further delay in view of the drastic decline in the prices of crude oil, natural gas and thermal coal.

Brent is currently trading below USD50 per barrel and has fallen nearly 55% in the last six months.

Moreover, international natural gas and thermal coal prices have also fallen to below USD 3 per million British thermal unit and USD 45 per short ton respectively.

Mr Datuk Soh Thian Lai president of Malaysian Iron and Steel Industry Federation said that a delay in lowering the electricity and natural gas tariffs would undermine the efforts by the industry to remain competitive in this very challenging time.

Mr Soh said that the government should have no doubts about reducing the tariffs due to the excellent performance of Tenaga Nasional Bhd financial results in 2014.

He pointed out that it was important to reduce the tariffs to prevent the country from losing her competitive edge in Asean and the global markets because neighbouring countries such as Singapore and Thailand had already lowered their electricity tariffs.

Mr Soh said that “Lowering the tariffs will assist the domestic iron and steel industry tide over the current difficult time as a result of ringgit's weakening, the impact of basic salary regulation, rising inflationary pressure, recent imposition of online service charge on the online renewal system for foreign workers permit, the forthcoming introduction of the Goods and Services Tax (GST) and most significantly, the influx of cheap steel material imports into Malaysia.”

He noted that the flooding of imports in the country mainly from China is a major concern for the Malaysian iron and steel industry as intense competition is resulting in many local steel companies keeping their businesses afloat. In 2013, the imports of steel reached a staggering 7 million MT, with China alone making 26% of the imports.