What Is the Current World Market Price Of Natural Gas

I am sure that not many knows how much the cost is and would like to know more about it.

Another important issue is the different type of measurement used in NGV calculation.

Natural Gas is actually gas. Gas are normally measured in either volume (standard cubic feet (scf) or standard meter cube (smc)) or in unit energy which we normaly used British Thermal Unit or BTU.

Current market price of natural gas now is within US 8 dollars to US 15 dollars per mmBTU. The mm is referred to is million.

In UK, the price now, in winter, is at US 10/mmBTU. While in Japan it is US 15 /mmBTU.

These figures fluactuate between these ranges depending on the trading down on the futures market. This is similar to that of crude oil or palm oil or gold.

How do U calculate in Ringgit Malaysia?

If the exchange rate is US 1 = RM 3.35 then the price per mmBTU is RM33.5.

Now is the next difficult question, How do convert this to liter of NGV?

Frankly I do not know the direct answer however I use my sharp mathematic sense call extrapolation.

The goverment confirmed that they are selling to our IPP at RM6.40 per mmBTU which is equivalent to RM 0.21 per liter.

So if the world price is RM33.5 per mmBTU, the world price in liter should be (0.21/6.4)X (33.5) = RM 1.099 per liter.

What is the price of NGV we are paying at the Petrol station today? Yes 0.68 sen per liter.

The different between 1.099 minus .68 = 0.419 sen is being lost of opportunity by Petronas. This is due to the fact that if they sell the same gas to other countries they will make profit from it.

Petronas will say that they subsidies the different. I personally feel that it is lost of opportunity and not subsidy.

Now let us look at how much petrol is being subsidies. For each liter the Government is subsidising RM 1.01 sen.

So if U convert to NGV you actually save our Government a total of 1.01 - 0.419 = 0.591 per liter U purchased.

If there are 1,000,000 people using petrol switch to NGV, their saving per year is equivalent to: (1,000,000 cars)X (20,000/10) X 0.591 = 1,182,000,000. Yes 1.182 billion ringgit per year.

Note the 20,000 is the estimated kilometer each car will travell in a year and the per liter the car will be able to travel to 10 kilometer.

So the conclusion is that if U convert your car today to NGV you help to save lots for the Government plus U save your bill too !!!!