PKR Youth leader wants govt to review electricity subsidies, factor in household situation

 

PKR Youth information chief Danish Hairudin wants the government to review electricity subsidies with broader considerations, saying that the current system based on power usage may not be all that fair.

This contrasts with Prime Minister Anwar Ibrahim's position that the current electricity payment structure in the peninsula benefits the vast majority of households, and that those with high usage are rich.

In his Merdeka Day address two weeks ago, while assuring the middle class that they are not being sidelined, Anwar said 85 percent of households benefit from the current subsidy programme.

Under the set-up, households using less than 600kWh per billing cycle are exempted from an Automatic Fuel Adjustment (AFA) charge, as well as a retail charge.

The AFA system calculates the cost of fuel needed to generate electricity based on market prices and foreign exchange rates, and is updated monthly. If the cost is below projected costs, users get a rebate, and if costs are higher, they have to pay extra.

Additionally, households using less than 1,000kWh also get an energy efficiency.

At present, the AFA for September is at 3.67 sen per kWh, as fuel prices remain above baseline due to global factors.

‘Time of Use’ system

In his statement today, Danish said the consumption threshold is not a good indicator of wealth.

"B40 and M40 families with many dependents, or who have senior citizens or family members who need medical equipment, may have higher energy use out of necessity, not because of wealth," he said.

He said while there is no need for blanket subsidies, the Energy Transition and Water Transformation and Energy Commission should review targeted AFA protection, taking into account income, number of dependents, and the real needs of a household.

At the same time, Danish asked Tenaga Nasional to make it easier to switch to the "Time of Use" system where electricity is cheaper during peak hours. However, he noted households with children or the elderly who stay at home won't fully benefit from it.

"When the situation changes, and the people are under pressure, the government must listen and act.

"The people just don't want global fuel price shocks to become their burden," he said. - Mkini