85% Of Malaysians Shielded From Electricity Tariff Hike, PM Announces

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Prime Minister Datuk Seri Anwar Ibrahim has announced that the electricity tariff increase scheduled for implementation on 1st July will not affect 85% of Malaysian households. The hike is designed to target industries and the super-rich, aligning with the Imbalance Cost Pass-Through (ICPT) mechanism.

Anwar emphasised that the tariff increase, set at less than 14%, is a reasonable measure to bolster government funding for essential development projects, including schools, hospitals, and other public interest programmes. He stated, “The move to increase electricity tariffs for industries and the super-rich is something we insist upon because if we don’t tax these groups, how can we increase allocations for schools and hospitals? We have to accept the reality of a reasonable tariff hike for industries and the super-rich.”

Addressing concerns in the Dewan Rakyat, Anwar clarified that the majority of households would remain unaffected by the tariff adjustment. He urged the public to understand the necessity of this policy, stating, “I told the business community yesterday, we will not compromise; we have to increase the tariffs, but it will not affect 85% of the households…so listen carefully, but not with angry sentiments.”

The Prime Minister also dismissed claims of economic unpredictability, asserting that the nation’s economic indicators are strong. He highlighted significant increases in investments, encouraging growth rates, and a strengthening ringgit, despite global geopolitical uncertainties.

Anwar remarked, “The economy is not a show; it is based on facts. The fact is that our investments have increased significantly compared to (the time under) previous prime ministers. The fact is that our growth rate is encouraging. The fact is that the ringgit is still strengthening despite uncertain geopolitical conditions and the tariffs imposed by other countries. Those are the facts…not lies…and we should know the difference.”

The ICPT mechanism allows for adjustments in electricity tariffs every six months, reflecting changes in fuel and other generation-related costs. This approach ensures that the financial burden is distributed equitably, with higher rates applied to those with greater consumption capacity.

In December 2024, Tenaga Nasional Berhad (TNB) announced a 14.2% increase in the base electricity tariff for Peninsular Malaysia, effective from January 2025 to December 2027. The base tariff was raised to 45.62 sen per kilowatt-hour (kWh) from the previous rate of 39.95 sen/kWh. However, for the first six months of 2025, there will be no change in the electricity tariff rate and structure, providing consumers with a grace period to adjust to the new base tariff.