The Prime Minister has announced that there will be no electricity or water tariff increase till the end of 2022 for domestic households in the Peninsular, giving the public much-needed relief, especially with the rising cost of essential goods and impending inflation on the horizon. This is part of the January announcement whereby the government delayed tariff increases for the first 6 months of the year.
However, with the cost of producing electricity having risen substantially due to raw materials like coal costing more to import, power-producing are reeling from the decision. The PM had said the government will continue to subside energy and water which will further impact the nation’s bottom line, it estimated this exercise will cost RM5.8 billion. While the public can take a breather, it’s the commercial sector that is in shock when TNB announces its new tariffs.
In its Bursa filing, Tenaga Nasional Berhad said the Imbalance Cost Pass-Through (“ICPT”) mechanism will continue to be implemented for the period of 1 July until 31 December 2022. Noting the decision will address the significant increase in generation costs due to the higher fuel prices used for the supply of electricity during the period of 1 January to 30 June 2022. Companies on the other hand will not be able to enjoy the tariff delays, TNB and the Energy Commission will be looking to revise the electricity charges for industries and companies. With reports of businesses being shuttered and still finding ways to recoup lost revenues, will the raise in electricity become the proverbial nail in the coffin?
