Malaysian utility giant Tenaga Nasional said it is struggling with billions of dollars in debt amidst growing pressure over costs sparked by spiralling fuel prices.

Che Khalib Mohamad Noh, chief executive officer of the state-controlled power company, said the RM30.5 billion (US$8.09 billion) debt was growing and that there were insufficient funds to cover expenditure.

"The debt has been accumulating. It never comes down, it has been growing because TNB does not have enough funds to cover expenditure," Che Kahlib was quoted as saying by the Bernama news agency.

"It will continue to grow if we don't have sufficient funds," he added.

The company has been lobbying for a hike in electricity tariffs and Che Khalib said rising fuel prices were escalating operational costs.

Billions of ringgit in required capital expenditure was also putting pressure on the company, he said.

"We still need to spend between RM4 billion to RM5 billion in capital expenditure annually. This cannot stop," he said.

"So, if we don't have new income, we have to continue borrowing and the time may come when TNB will face difficulties in borrowing due to the size of the debt," he said.

No tariff increase

In spite of TNB's warning, Energy Minister Dr Lim Keng Yaik Thursday shot down any prospect of a tariff hike, a move that would run counter to government efforts to curb inflation.

"The cabinet is not in the mood for any type of tariff increase," Lim said.

"I tell you it's the wrong time," he added.

Malaysia this month announced a series of measures including capping fuel prices and road tolls to try to contain inflation and keep economic growth on track in the face of rising fuel prices worldwide.

Malaysia's inflation rate hit a six-year high of 3.7 percent in August due to higher costs of items including fuel and food in figures released Wednesday.