30th September 2025 - 2 min read
Malaysian households and businesses can expect lower electricity bills starting in October, as Tenaga Nasional Bhd (TNB) announces a significant increase in the electricity rebate. This change is a result of the new Automatic Fuel Adjustment (AFA) mechanism, which has been set at a rebate of 6.5 sen per kilowatt-hour (kWh). This is a notable increase from the 1.10 sen per kWh rebate in September.
The AFA mechanism, introduced by the Energy Commission in July, is a new system that adjusts electricity tariffs monthly. It replaces the previous Imbalance Cost Pass-Through (ICPT) mechanism, which was adjusted every six months. The AFA takes into account fluctuations in fuel costs, such as gas and coal, which are used to generate electricity, as well as changes in foreign exchange rates. The significant increase in the rebate for October reflects a decrease in these underlying fuel costs.
The new 6.5 sen/kWh rebate will apply to most consumers, resulting in a reduction of over 5 sen/kWh compared to the previous month. As always, there are some exceptions. Domestic consumers who use less than 600 kWh of electricity per month are already exempt from both surcharges and rebates under the AFA. This group of consumers, whose monthly bills are typically below RM216, will not see a change in their electricity rates. Additionally, consumers who subscribe to the Green Electricity Tariff (GET) are also not affected, as their electricity comes from certified renewable energy sources.
The AFA mechanism has a monthly cap of three sen per kWh, both for surcharges and rebates. Any adjustments exceeding this limit, such as the 6.5 sen/kWh rebate for October, require approval from the Cabinet. Looking ahead, TNB’s three-month projection suggests that rebates will continue. The projections show an expected rebate of 5.27 sen/kWh in November, 5.68 sen/kWh in December, and 1.10 sen/kWh in January 2026.
What are your thoughts on the new AFA mechanism and its potential impact on your household finances? Share your views in the comments below.
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Christina writes about personal finance with an eye for making the complicated feel straightforward. She is drawn to the everyday money decisions people face and genuinely enjoys finding the clearest way to explain them. Between articles, she is probably napping, on a hiking trail, or terrorising her sister’s cats.
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