PETALING JAYA: The Government is expected to announce on Monday details of the anticipated hike in electricity tariff rates - 15%, or 4.9 sen per kilowatt hour (kWh).
The announcement is expected to take place in Parliament, according to sources.
On Nov 27, Energy, Green Technology and Water Minister Datuk Seri Dr Maximus Ongkili said the final decision on the increase has yet to be made by the Cabinet, but the hike could happen anytime in 2014.
Ongkili said the final decision on the timing and quantum of the increase is with the Cabinet.
He said the tariff hike was necessary to ensure Malaysia's long-term competitiveness and sustainability of the power sector.
The average tariff rate in Malaysia is 33.5 sen per kWh, which is about 8.5 sen, or 25.3%, below the “true cost” of power estimated at 42 sen per kWh.
Based on the prevailing rate, the proposed adjustment in electricity tariffs will likely involve an increase of up to 7 sen per kWh.
To put things into perspective, a home appliance that is rated at 1,000W, if left switched on for one hour, would consume one kWh of electricity.
Industrial and commercial groups collectively consume about 75% of the electricity generated in Malaysia, and currently the average tariff for industrial users stands at 32.2 sen per kWh, while that for commercial users stands at 42 sen per kWh and residential at 29.7 sen per kWh.
With regards to the low-income group, Ongkili said that the Government would ensure that their electricity bills would not be adversely impacted by the new tariff.
“When we talk about increasing electricity tariffs, what is important for us as the government is to consider the impact on consumers, especially the low-income group,” he said.
The Government had reiterated during Budget 2014 in October that it would stick to a plan to gradually reduce subsidies to improve the country’s fiscal position. The plan was to reduce total subsidies to RM39.4bil next year from the almost RM47bil allocated for various subsidies, incentives and assistance in 2013.
Subsidies for the power sector alone are estimated to cost the Government RM8bil to RM12bil per year, depending on the prevailing prices of the input fuel, specifically gas.
Gas currently accounts for about 50% of the fuel used for electricity generation in Peninsular Malaysia, while coal provides 40%, hydropower about 8% and renewable sources about 2%. Gas is supplied by Petroliam Nasional Bhd to the power sector at subsidised prices, while coal is obtained at market rates.
The electricity tariff in Malaysia was last revised in June 2011 after the Government raised subsidised gas price to the power sector to RM13.70 from RM10.70 per million metric British thermal unit (mmbtu).
Gas is currently quoted at around RM50 per mmbtu in the international market. -Star
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.