Electricity Tariff Hike, Labour Costs Too Burdensome

Automotive component manufacturers are asking the government to postpone the sudden implementation of electricity tariffs of 566 percent to 20 sen and 27.7 sen/kWh on January 1, 2023 from the current rate of 3 sen/kWh.

Perodua Suppliers Association (P2SA) President Helmi Sheikh Mahmood this increase will have a profound impact on all industries in this country, big or small because the impact will be felt by all.

Helmi said this in a joint statement on behalf of the Proton Vendors Association (PVA), the Toyota Suppliers Club (TSC), the Honda Malaysia Suppliers Club (HMSC) and the Car Component Manufacturers Association (MACPMA).

Helmi said local automotive component manufacturers understand the government’s objective to remove subsidies to industries that use medium voltage and high voltage in order to reduce the cost impact due to the increase in coal prices to the country’s energy sector.

“Nevertheless, the impact of the tariff that will be introduced and the impact of the amendment to the Workers’ Act 1955 (Amendment 2022) are too heavy for us to bear, said Helmi in the joint statement.”

He said the amendment to the act which had a high impact on the operating costs of the industry increased the minimum wage level by 25 percent to RM1,500 from RM1,200 previously, and reduced the amount of work to 45 hours a week from 48 hours previously, resulting in an increase in costs more time.

“Both of these factors (increased tariffs and the amendment of the Workers’ Act 1955 (Amendment 2022)) these costs cannot be absorbed by our members and we will be forced to pass on these increased costs to our customers.

“This will have a negative impact on the automotive industry because it will increase the price of vehicles dramatically,” said Helmi.

“We also want to serve the country and we request the government to postpone the implementation of the electricity tariff increase and cooperate with us to ensure that any changes in policy, laws, incentives, tariffs or/and other initiatives will have the desired effect,” he said.

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