15th June 2022 - 2 min read
Domestic users may see a surcharge imposed on their electricity bills next month, following significant hikes in global fuel prices due to the ongoing Russia-Ukraine conflict. This comes as the government is reportedly considering whether to allow consumers to shoulder the growing cost.
To note, prices for coal – which contributes to almost 50% of Malaysia’s power generation needs – have increased by fourfold since the tension between Russia and Ukraine escalated. The benchmark Newcastle coal price, for instance, rose from US$67.5 per tonne to a record high of US$440 (approximately RM1,940) in early March. Unsurprisingly, this has caused difficulties for Tenaga Nasional Bhd to maintain the current rates for electricity usage.
Given the situation, a source said that Putrajaya is contemplating updating the Imbalance Cost Pass-Through (ICPT) formula during its next review to forward the cost to consumers in the form of a surcharge. Briefly, the ICPT is a mechanism used to review the electricity tariff every six months, allowing it to reflect the changes in fuel and other generation-related costs. Its next review is due to take place in July 2022.
If approved, this marks the first time that domestic users will be charged a surcharge in their electricity bill, on top of the base electricity tariff. The surcharge amount will be determined by the Energy Commission (EC). Meanwhile, the imposition of electricity tariff surcharges is not a new occurrence for commercial users.
At present, Malaysia’s base electricity tariff is set at 39.45 sen/kilowatt hour (kWh) for all electricity users in Peninsular Malaysia – to be maintained until 31 December 2024. Residential users are also currently benefitting from a rebate of 2 sen/kWh, with no surcharge imposed. Commercial users, on the other hand, do not enjoy any rebates, and are required to pay a surcharge of 3.7 sen/kWh.
(Source: The Vibes)
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