Malaysia’s electricity supply remains secure, but the country continues to face cost pressures driven by volatile global fuel prices, particularly coal and gas, Economy Minister YB Akmal Nasrullah said today.
Speaking at the Global Supply Crisis Briefing, Akmal stressed that the main risk to the power sector is no longer supply shortage, but the uncertainty in international fuel markets.
“When fuel prices such as coal and gas rise, electricity generation costs also increase. If not carefully managed, this pressure can eventually affect electricity tariffs,” he said.
As of April 25, 2026, Malaysia’s generation mix remains heavily dependent on coal at 54% and gas at 40%, leaving the system exposed to global price movements.
Heavy reliance on imported coal
Coal imports reached 7.94 million metric tonnes in the first quarter of 2026, with total annual demand projected at 35.99 million metric tonnes.
The Energy Commission is currently closely monitoring coal stock levels at power plants to ensure minimum safety thresholds are maintained.
Gas supply expected to tighten mid-year
Gas usage for electricity generation averaged 1,011 million standard cubic feet per day in Q1 2026, largely supported by domestic supply from Kerteh.
However, the share of gas in the generation mix is expected to decline between July and August 2026 due to scheduled maintenance works that will temporarily constrain gas supply to the power sector.
“In this situation, the system must have the flexibility to switch to alternative fuel sources to ensure supply stability,” Akmal said.
Rising demand driven by hot weather
Electricity demand is also trending upward. Between April 20 and 25, 2026, peak demand rose 1.9% to 20,640 MW, compared to 20,257 MW the previous week.
A new peak of 21,468 MW was recorded on April 23, surpassing the previous high of 21,276 MW, largely driven by hotter weather and increased air-conditioning use in homes, businesses, and workplaces.
Lag effect from global fuel prices
Akmal also noted a lag effect in electricity costs, where the impact of fuel price increases typically takes about two months to be reflected in generation costs.
For May 2026, generation costs are projected to rise, driven by coal prices increasing to RM21.28 per million British thermal units (MMBtu), compared to the base price of RM19.14 per MMBtu.
Majority of households protected from surcharge
The government reiterated its commitment to cushioning the impact on consumers and businesses.
Around 7.5 million domestic users — or 85% of households consuming below 600 kWh — will continue to be fully exempted from the Automatic Fuel Adjustment (AFA) charge.
He also urged the public to adopt energy-saving habits, such as setting air-conditioners at reasonable temperatures, switching off unused appliances, and managing electricity use during peak hours.
