Govt to spend RM10bil to subsidise electricity tariffs

 

Natural resources, environment and climate change minister Nik Nazmi Nik Ahmad says the government will save RM4.16 billion by implementing the electricity tariff subsidy in a targeted manner.

PUTRAJAYA: The government will be allocating RM10.76 billion to subsidise electricity tariffs to assist Malaysians, says natural resources, environment and climate change minister Nik Nazmi Nik Ahmad.

At a press conference, Nik Nazmi said the actual cost of subsidies to maintain the current electricity tariff would have come up to RM14.91 billion if it was implemented across the board.

“However, with this targeted subsidy scheme, an additional allocation of RM4.16 billion which would have been used to bear the cost of the subsidy can now be allocated to help the public through other means,” he said.

The minister said RM8.74 billion will be allocated for low voltage non-domestic users, namely micro businesses and small- and medium-sized enterprises (SMEs).

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Meanwhile, RM90 million will be allocated to subsidise the tariffs for farmers and animal breeders to prevent any increase in prices of food and agricultural products.

“This means that nine million electricity users, or over 90% of users in Peninsular Malaysia will not be affected by the increase in fuel prices for electricity generation,” he said.

Without the subsidy, Nik Nazmi said all users in the Peninsula could face a surcharge of 27 sen/kWj from Jan 1 to June 30, naturally causing a rise in their living expenses.

“However, medium voltage (MV) and high voltage (HV) users among industry participants, including multinational corporations (MNCs), will face a surcharge of 20 sen/kWj instead of the full 27 sen/kWj.

“The government will subsidise RM1.93 billion in order to avoid a significant increase in the surcharge should it be passed on entirely to the users,” he said, adding that the surcharge for industries will start on Jan 1.

He acknowledged the role that big companies and MNCs had in Malaysia’s economy, but maintained that the current measures were the “most suitable” for now.

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He added that industry players were also aware of the rise in global energy prices, adding that they should not be surprised by any rise in tariffs.

“Yes, there will be an effect (on the supply chain downstream) but it will be small. There will definitely be an impact, but we hope that this will ensure companies make an effort to be more energy efficient.” - FMT