Malaysia to allow power hike if gas price raised

KUALA LUMPUR, Dec 3 (Reuters) - Malaysia will allow state power firm Tenaga Nasional (TENA.KL: Quote, Profile, Research, Stock Buzz) to raise power tariffs if the price it pays for natural gas is increased, Second Finance Minister Nor Mohamed Yakcop said on Monday.

Tenaga, the country's monopoly distributor, and independent power producers buy gas at a heavily subsidised rate from state oil company Petronas. This is part of a web of costly energy subsidies that the Malaysian government says is unsustainable.

Deputy Prime Minister Najib Razak last week said a review of gas prices would be carried out along with electricity tariffs and only after considering the impact on people and Tenaga. (Reporting by Liau Y-sing)