Govt reviewing electricity tariffs for fairer charges next year

The government is reviewing the electricity tariff structure based on consumption levels for next year to ensure fairer charges for domestic consumers compared to high-impact industrial sectors.

Deputy prime minister Fadillah Yusof said the review aimed to separate domestic and industrial tariffs, especially for premises that have bigger electricity demands, like data centres.

“This is to ensure fairness and equity for consumers, especially to protect domestic users,” he said in the Dewan Rakyat.

Fadillah, who is also the energy transition and water transformation minister, was responding to a supplementary question from Azri Yusof (PH-Shah Alam) regarding planned control measures to balance the public’s cost of living and energy sector sustainability.

Fadillah said the Energy Commission had been tasked with conducting a detailed study to determine the implementation methods for next year.

Surging global fuel prices driven by geopolitical tensions in the Middle East, specifically disruptions in the Strait of Hormuz, have directly impacted electricity generation costs in Peninsular Malaysia.

The Strait of Hormuz handles approximately 20% of the world’s crude oil and liquefied natural gas trade and serves as the transit route for 40% of Malaysia’s fuel supply.

“This has caused costs in gas and coal to spike beyond the base prices set under the Regulatory Period 4 (RP4) 2025-2027.

“Operational costs continue to rise, driven by increased air conditioning demand during the prolonged heatwave and a simultaneous drop in power plant capacity,” said Fadillah.

To mitigate the impact of the ongoing crisis, the government has extended electricity bill protections from Sept 1 until Dec 31.