Malaysia to hike electricity rates next year
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Consumers in Malaysia should brace for a 10-20-per-cent hike in the electricity tariff next year.
“The quantum (of increase) is not finalised … but anything below 20 per cent is reasonable,” said Energy, Green Technology and Water Minister Maximus Ongkili.
The final decision on the increase has yet to be made by the cabinet, but the hike could happen anytime in 2014, he told reporters on Wednesday.
The move, he said, would be in line with the government’s plan to gradually cut subsidies.
It would also be in line with its efforts to boost efficiency and competitiveness in the power industry, as well as to ensure sufficient returns to capital for utility company Tenaga Nasional to cover its costs.
A tariff hike will see rates for both industry and households increase, but any hike for businesses will be mitigated against the need for them to remain competitive.
A home appliance rated at 1,000 watts, if left switched on for one hour, would use 1 kilowatt-hour (kWh) of electricity.
A 10-20-per-cent hike would translate into an increase of 3.35-6.7 sen per kWh to 36.85-40.2.
This is based on the prevailing tariff rate of 33.5 sen per kWh, which is about 8.5 sen below the “true cost” of power at 42 sen per kWh.
In comparison, electricity tariffs in the Philippines and Thailand are 58 and 48 sen per kWh.
Ongkili said the government would implement a “stabilisation” programme to protect consumers, especially the low-income group, when the tariff hike takes effect.
