Not raising electricity tariffs good move to control inflation - experts

SHAH ALAM - The government not raising the electricity tariff is a good decision in order to control inflation and reduce the public's burden, says an expert.

Academy of Professors Malaysia Regional Development Cluster Council member and head Professor Dr K. Kuperan Viswanatham said this will ensure that a basic necessity such as electricity will not be burden and prices are kept under control

“90 per cent of the consumers use less than 1,500 kWh, so this will help a large segment of the population.

“For the T20, if they are consuming more than 1,500 kWh they have to pay more and they should be able to afford this,” he said.

He added for a consumption of 1,500 kWh a consumer will have to pay up to RM450 a month.

“However most consumers consume less than 500 kWh so at most their monthly electricity bill will be below RM150,” he said.

Meanwhile Bank Muamalat Malaysia Bhd chief economist and social finance head Dr Mohd Afzanizam Abdul Rashid said it is a step in the right direction as the key message here is the government is attempting to rationalise the subsidies so that it will be more targeted.

“It’s not an easy task, especially since higher cost of living is the main concern.

“However the government needs to ensure that it is targeted so that only those who are deserving will be enjoying the subsidies,” he said.

He added certain groups in the T20 category will probably be affected but it is more for those who are really earn extra high-incomes.

“Given that this income band has more buffers, perhaps they can withstand the rise in their electricity bill.

“Based on what has been announced, the estimated figure is RM708 which is about 25 per cent higher than the previous level when they received the subsidies.

“Those who consume less than 1,500 kWh, may not be affected,” he said.

The veteran economist added that taxation needs to fair for it to be progressive.

“Government has to agree to this Tax principle, on principle first and then the actual rates can be easily worked out,” he expressed.

Yesterday, Natural Resources Environment and Climate Change Minister Nik Nazmi Nik Ahmad announced domestic users in Peninsular Malaysia with a monthly electricity consumption of 1,500 kWh and below will not experience an increase in tariffs.

Following the electricity tariff adjustment from July 1 to Dec 31 under the implementation of the Imbalance Cost Pass-Through (ICPT) mechanism.