Don’t Use Electricity Increase To Hike Goods Price Says PM To Business Owners

There have been murmurs on the ground from the business community with regards to the recent announcement by the Energy Commission on electricity pricing for the commercial and industrial sectors.

As reported by BusinessToday, while the EC has stated that domestic users will not be subject to electricity price increase despite power generators being due for a tariff review and possible upward revision due to circumstances the Prime Minister has advised the commission against any rate hike for the time being. However, the case is not so rosy for the business owner, as they will be imposed a surcharge of 3.7sen kw/j under the Imbalance Cost Pass Through (ICPT) mechanism.

The SME Association of Malaysian says for most SMEs, especially those in the manufacturing sector, electricity is the second or third largest cost factor, behind raw materials and labour costs. A hike of 18.4 percent in utility bills for a business that’s running at a sub-10 percent margin could mean a reduction of between 20 to 40 of its profit, and could even mean a difference between making and losing money.

The move by EC will ultimately result in 1.6 million commercial and industrial users paying between 11.8 to 18.4 percent more for electricity from 1 February 2022.

So, when the Prime Minister calls on business owners not to pass on the cost to consumers, it is quite unclear on the Government’s motive, does the PM expect this community to absorb the cost and suffer further or does it want the sector to recover from the 2-year turbulence?

With businesses already struggling or just finding some respite with the reopening of the economy, is such an increase justified or should the PM be more considerate and include these business communities in his ‘Keluarga Malaysia’ theme as well?

Previous articleInterest in Energy And Plantation Stocks
Next articleChina’s Service Trade Up 16% Plans To Open Sector Further

LEAVE A REPLY

Please enter your comment!
Please enter your name here