Govt to bear over RM10 billion in power subsidies, says Nik Nazmi

Noel Achariam

The government has made RM5.4 billion in electricity subsidy savings from January 1 to June 30, says Natural Resources, Environment, and Climate Change Minister Nik Nazmi Nik Ahmad. – The Malaysian Insight file pic, May 25, 2023.

THE government has committed to financing RM10.76 billion in electricity bill subsidies from January 1 to June 30, Natural Resources, Environment, and Climate Change Minister Nik Nazmi Nik Ahmad said. 

He said this is to ensure 9.5 million electricity users, representing 99% of all users in the peninsula, will not be affected by the rise in fuel costs for power generation.

“This means the government has made subsidy savings of RM5.4 billion for the period of January 1 to June 30, whose costs have been passed on to consumers in a targeted manner,” he said in Dewan Rakyat today.

Nik was responding to Khoo Poay Tiong (Kota Melaka-PH), who asked about the total subsidy expenditure by the government after the Imbalance Cost Pass-Through (ICPT) adjustment in January.

Khoo also asked about other measures to be taken by the government to rationalise electricity subsidies in Malaysia.

Nik said the electricity tariff is reviewed every six months through the ICPT, taking into account the cost of materials and other generation costs for the past six months.

“The cost of ICPT for the period from July to December 2022 is as much as RM16.16 billion, equivalent to a surcharge rate of 27 sen/kWh, which should be released to all users for the period from January to June 2023.

“But the government has agreed to maintain the rebate of 2 sen/kWh to all domestic consumers and maintain the 3.7 sen/kWh surcharge to non-domestic consumers in the low-voltage category (tariffs B and D) and specific agricultural categories (tariffs H, H1, and H2) for the period of January 1 to June 30.”

He said the ministry is looking into options for reasonable ICPT surcharge reliefs for peninsular consumers for July 1 to December 31.

Nik said the government will ensure appropriate surcharges are applied to micro, small and medium enterprises, agricultural tariff category users, and water operators so the national Consumer Price Index and inflation are under control.

“We want to achieve energy efficiency and transition to renewable energy, and only when we pass the costs to high- and medium-voltage users, big users or the T20 can we achieve that objective.” – May 25, 2023.

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