April 13 2005 - THE Malaysian Oleochemical Manufacturers Group (MOMG)wants export duty for crude palm kernel oil (CPKO) imposed on producers bestandardised nationwide.

MOMG said lower export tax (7 per cent) imposed on CPKO from Sabah andSarawak compared with 10 per cent for the Peninsular’s CPKO, resulted inCPKO produced from Sabah and Sarawak being exported rather than shipped toPeninsular-based oleochemical manufacturers.

Alternatively, the association suggests additional income tax deductionamounting to 25 per cent of the cost of CPKO purchased from Sabah andSarawak by manufacturers in the Peninsular.

In its memorandum submitted at the annual dialogue with InternationalTrade and Industry Ministry in Kuala Lumpur yesterday, MOMG said theprices of CPKO from Sabah and Sarawak are estimated to be 6 per centhigher than those from the Peninsular due to the 3 per cent differentialand 3 per cent for ocean freight, shore tank rental and handling.

On natural gas, MOMG has proposed that the Government come out with aspecial tariff for Gas Malaysia Sdn Bhd’s large industrial users in viewof the Government’s promotion on the use of natural gas as a cleanenvironmentally-friendly fuel.

It also said that since natural gas is considered a utility, there shouldnot be price disparity in its supply.

Currently, Petronas Gas Bhd and Gas Malaysia charge a different rate forlarge industrial users. Petronas Gas charges RM11.32 for every metricmillion per British Thermal Units (mm btu), while Gas Malaysia chargesRM12.87 mm btu.

MOMG also proposes for another storage terminal to be built in southernPeninsular Malaysia as it said the bulk storage terminal at Pasir Gudangport is the only terminal for for oleochemical products.

This resulted in high rentals for spot tank with longer advance notice andhigh charges for tank cleaning and heating.