The implementation of electricity tariff hikes will only lead to the end of many businesses, both big and small, according to restaurateurs, mall businesses and retailers.
The businesses said a "humongous" tariff hike of 15 percent, or up to a 25 percent hike on off-peak tariff, would result in a snowball effect on the costs of goods and services and further depress the country's economic recovery.
They said this is compounded by the government warning businesses not to pass on the tariff hike to consumers.
"The sudden and immediate implementation of the hike in electricity charges is shocking in so many ways.
"The hike is humongous, and even in the best of times, it is unlikely to be possible for businesses to absorb.
"At this critical juncture where all businesses, big and small, are still struggling in the survival and revival mode, this hike could be the death knell of many enterprises," they said in a joint statement prepared by Malaysia Shopping Malls Association (PPK).
The statement said that rising fuel prices affecting electricity generation costs were due mainly to supply chain interruptions coupled with geopolitical trade play.
"This energy situation is further aggravated due to the winter season and the current severe winter climate.
"Once the supply chain is restored and normalcy returns, market forces will cause the predatory pricing to recede, and competition will prevail," it said.
The businesses appealed to the government not to fuel and set the train of inflation further as all consumers are already experiencing inflationary pressures.
"The inflationary pressures are already being experienced by all consumers, which is already hurting and adding to the suffering, woes and desperation of our rakyat," they said.
The statement called on the government to hold off on increasing the tariff hike until the energy situation is clearer.
The joint statement was signed by:
- Building Management Association of Malaysia (BMAM)
- Bumiputra Retailers Organisation (BRO)
- Industries Unite (IU)
- Malaysia REIT Managers Association (MRMA)
- Malaysia Retail Chain Association (MRCA)
- Malaysia Retailers Association (MRA)
- Malaysian Association of Film Exhibitors (MAFE)
- Malaysian Association of Theme Parks & Family Attractions (MATFA)
- Persatuan Pemilik Restoran dan Bistro (PPRB)
- Persatuan Pengurusan Kompleks Malaysia (PPK) – Malaysia Shopping Malls Association
- Real Estate and Housing Developers Association (Rehda)
On Jan 27, Energy and Natural Resources Minister Takiyuddin Hassan said that the new electricity tariff for 2022-2024 would likely be implemented from Feb 1.
Less than 48 hours later, the government announced its decision not to increase domestic electricity tariffs - continuing subsidies worth more than RM700 million for domestic users.
On the matter, Prime Minister Ismail Sabri Yaakob tweeted that the cabinet's decision not to increase domestic user power tariffs benefits more than nine million users.
On Feb 4, Bagan MP Lim Guan Eng demanded that the government reverse its move to impose electricity tariff hikes on businesses claiming it risked adversely impacting this year's economic performance and the profitability and survivability of businesses. - Mkini
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