Malaysia: Power tariffs to rise by 10-20%

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TNBElectricity prices in Malaysia will go up by 10 to 20 per cent in 2014, according to a report in The Star. The exact rates are currently being discussed by the cabinet.

“The quantum (of increase) is not finalised… but anything below 20 per cent is reasonable,” said Energy, Green Technology and Water Minister Datuk Seri Dr Maximus Ongkili. 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 Malaysian power industry, as well as to ensure sufficient returns to capital for utility company Tenaga Nasional Bhd to cover its costs.

A tariff hike will see rates for both industrial and households increase, but any hike for businesses will be mitigated against the need for them to remain competitive. A home appliance that is rated at 1,000 watts, if left switched on for one hour, would use 1 kilowatt-hour (kWh) of electricity. A 10 per cent-20 per cent hike would translate into an increase of 3.35 sen/6.7 sen per kWh to 36.85 sen/40.2 sen per kWh.

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 sen per kWh and 48 sen per kWh respectively.

Ongkili said the Government would implement a “stabilisation” programme to protect consumers, especially the low-income group, when the tariff hike takes effect. Details of the programme have yet to be finalised.

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Reading Time: 2 minutes

Electricity prices in Malaysia will go up by 10 to 20 per cent in 2014, according to a report in The Star. The exact rates are currently being discussed by the cabinet.

Reading Time: 2 minutes

TNBElectricity prices in Malaysia will go up by 10 to 20 per cent in 2014, according to a report in The Star. The exact rates are currently being discussed by the cabinet.

“The quantum (of increase) is not finalised… but anything below 20 per cent is reasonable,” said Energy, Green Technology and Water Minister Datuk Seri Dr Maximus Ongkili. 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 Malaysian power industry, as well as to ensure sufficient returns to capital for utility company Tenaga Nasional Bhd to cover its costs.

A tariff hike will see rates for both industrial and households increase, but any hike for businesses will be mitigated against the need for them to remain competitive. A home appliance that is rated at 1,000 watts, if left switched on for one hour, would use 1 kilowatt-hour (kWh) of electricity. A 10 per cent-20 per cent hike would translate into an increase of 3.35 sen/6.7 sen per kWh to 36.85 sen/40.2 sen per kWh.

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 sen per kWh and 48 sen per kWh respectively.

Ongkili said the Government would implement a “stabilisation” programme to protect consumers, especially the low-income group, when the tariff hike takes effect. Details of the programme have yet to be finalised.

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