Notes

Transport by Rail and by Air - A Summary

There's a growing concern about the high price of Lng Malaysia. The price of oil is a key factor in the expense of living of Malaysia. As the nation relies heavily on oil products and crude oil exports, the high price of oil products and crude oil imports is felt by the Malaysian market every day. The high price of Lng gas particularly is affecting the national transport sector. Many small and medium scale industries are losing opportunities to tap into the Lng gas market as prices are soaring up due to the oversupply of this commodity in recent years.

The increasing cost of Lng gas is having an adverse impact on the competitiveness of the national energy industry. Domestic gas demand will deplete over time due to the rising cost of Lng. Industry players are searching for ways to reduce the cost of production. Over the last few years, the Government has made numerous changes to the way Lng is generated, which have helped to improve competitiveness and minimize the cost of Lng.

The Government's efforts to market Lng manufacturing in Malaysia have led in several tax incentives for domestic production of Lng. In addition to tax rebates, State Governments has also offered various incentives to Lng industry as a means of promoting competition. These incentives cover research and development costs, infrastructure development costs and the cost of maintaining a standard of production. Some of these rebates and incentives include the first point published in 2021, the extension of the current generation tax rate and the awarding of a 20 percent share of the whole cost of Lng development to all stakeholders.

Given the price of lng in Malaysian market, it is expected that the expense of lng in international market would also go up. This may result in the movement of Lng railroad cargo from Singapore into other Asian countries. If the trend continues, the expense of lng may become very high in Malaysia. In this situation, the export of Lng could become an extremely competitive edge for Malaysia in the global level.

The transportation of Lng by rail freight has a lot of disadvantages. First, the cost of lng is high due to the higher cost of fuel. Secondly, the probability of accidents and the probability of accidents is high on the rail freight. The possibilities of a freight train accident are high on the open stretches of railroad track where there are little or no railroad traffic and the risk of a collision is increased in areas where the population is dense.

On the other hand, the expense of air freight to Lng Industry in Malaysia is comparatively low because of the lack of government regulation and the absence of a railway network. Moreover, the cost of air cargo can be controlled because the expense of fuel is minimal. Moreover, NGC Energy is fast means of transporting Lng from 1 location to another.


Due to the lack of a railway network, the expense of transport by rail freight from and to Lng could be controlled. Air freight transport cost varies from time to time in line with the fuel cost and the destinations. Hence, the price of transport by air cargo can be predicted fairly well.

Both the methods of transport can offer the service of receiving and sending shipments to and from Lng by air or by rail. However, the cost of transportation by air cargo remains high compared to that of rail freight. It is important to note that if the Lng Industries feels that the expense of transport by air freight is high, they may reduce the volume of shipments. This could result in the loss of revenue for the Lng Industry.

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