Image credit: The Malaysian Reserve
PETALING JAYA: The government’s move to maintain the electricity tariff rate for all consumers in the second half of this year is timely and considerate, say both consumer and business groups.
They said this means there would not be an additional financial burden on businesses that were recovering or the people, who had to cope with the rising cost of living.
Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) treasurer-general Datuk Koong Lin Loong said the announcement was indeed “good news” to both businesses and consumers.
“The recovery from the pandemic is undoubtedly underway, but it has not been stable due to various external factors.
“Many small and medium enterprises (SMEs) have exhausted their reserves to survive the pandemic.
“If the tariff was to be increased, it will add on to their cost of doing business,” he said.
Koong, who is also ACCCIM’s SMEs committee chairman, said keeping the status quo for the electricity tariff was what the government could do within its control to support the people and businesses.
“Electricity is an essential input in manufacturing and production.
“Minus the external factors that we cannot control, such as the ongoing Russia-Ukraine war, price increases in raw materials and logistics, it is crucial that the government continue with this subsidy by not raising the tariff, at least during the pandemic recovery period,” he said.
Koong also suggested the government review the rate mechanism for electricity by introducing a lower industry rate during the late-night off-peak hours.
“For example, a cheaper rate for industries from 12am to 6am can encourage factories to produce at off-peak hours.
“This will help lessen electricity demand during peak hours and decrease wastage during non-peak hours,” he said, adding that it would also encourage businesses to work harder.
Federation of Malaysian Consumers Associations chief executive officer Dr Saravanan Thambirajah also lauded the move, saying the consequences would be dire had the government not stepped in with the subsidy.
“We rely on fossil fuels to generate electricity, and 70% of the generation cost comes from coal, the price of which had shot up because of many external factors.
“Despite earlier reports of a possible tariff increase, the government intervened and pumped in RM5.8bil in subsidies to tackle the tariff increase.
“At this moment, the government is doing its best not to pass on the increase in cost to consumers.
“Without the subsidy, our consumer price index (CPI) would have increased even more. The subsidy had helped maintain the price of consumer products,” he said.
He added that subsidies should remain as long as the country was recovering from the pandemic. He also said an eventual increase should be gradual and not drastic.
Saravanan, who is also the president of the Water and Energy Consumer Association of Malaysia, said consumers had a role to play in reducing their electricity consumption and wastage.
“Subsidies usually involve billions that can be better used for other development to benefit the people.
“They would be a burden on the government in the long term.
“When we use or waste less electricity, less coal needs to be purchased to produce power. In the long run, we help ourselves too.
“We need to take charge, moving forward. Collectively, if we can reduce consumption by up to 30%, we will probably see no surcharge but rebates.
“When we use less coal for power, we move towards renewable energy. In the long term, this will benefit the country, economy, and the environment,” he added.
On Aug 27, the Finance Ministry said the electricity tariff for all consumers in the second half of 2022 would be maintained at the same rate as the first half of the year.
On June 24, Tenaga Nasional Bhd said the imbalance cost pass-through (ICPT) mechanism would continue to be implemented from July 1 until Dec 31, 2022.
Earlier, Prime Minister Datuk Seri Ismail Sabri Yaakob announced that the rebate of 2 sen/kWh is maintained for all domestic consumers, and no surcharge applies.
The imposition of a surcharge of 3.70 sen/kWh will be maintained on commercial and industrial users.
Source: https://www.thestar.com.my/news/nation/2022/08/29/thumbs-up-for-status-quo