More groups oppose power tariff hike for businesses

 

An economist says the power rate hike for the commercial sector would affect consumers and dampen economic recovery. (Bernama pic)

PETALING JAYA: More groups have come forward to oppose the increase in electricity rates for commercial and industrial users.

Earlier today, the Small and Medium Enterprises Association of Malaysia (Samenta) had warned that businessmen may be forced to pass on some of the increase in operational costs to consumers.

“If the proposed hike continues as planned, it will be difficult, if not impossible, for businesses to absorb the increased costs without passing them on partially to the consumers, just as Tenaga Nasional Bhd is doing,” Samenta chairman William Ng said.

According to Prime Minister Ismail Sabri Yaakob, the electricity rate hike came from the removal of rebates and the imposition of a surcharge on commercial users. He stressed that domestic users had been spared the increase.

However, economist Barjoyai Bardai told FMT that the hike would have a cascading effect on consumers that would dampen economic recovery.

“The hike in electricity rate will have an adverse impact on the whole economy, resulting in an increase in inflation.”

Sharing a similar view with Samenta, the Federation of Malaysian Consumers Associations (Fomca) believes that consumers may feel the rise in the prices of goods in no time.

Fomca CEO Saravanan Thambirajah urged the domestic trade and consumer affairs ministry to monitor and ensure that traders do not raise prices indiscriminately.

“This is very important because the prices of goods and services have been on the rise and it will affect the purchasing power of consumers, especially the B50 group,” he said in a statement yesterday.

Meanwhile, the Federation of Malaysian Manufacturers (FMM) said it was disappointed that it was not consulted on this matter.

“As it is now, industries are already struggling with inflationary pricing on almost all business costs and would struggle to deal with higher prices for power consumption.

“It will also have a cascading effect on other costs, especially raw materials, that may further increase inflation,” FMM president Soh Thian Lai said in a statement.

Further, he said if operating costs continued to rise, manufacturers may need to make some adjustments, either by increasing product prices or freezing worker intake, which would derail business recovery efforts.

“FMM appeals to the government to defer any upward increase in electricity tariff, preferably until the global supply chain constraints have eased and commodity prices have normalised,” he added. - FMT