The government will no longer provide subsidies to homes with extremely high electricity usage, according to a statement from Datuk Seri Anwar Ibrahim.

According to the Prime Minister, homes with heavy electricity usage, such as those that use three fans and four air conditioners, will be compelled to pay the full cost without subsidies. This suggests that there won't be a tariff hike for the B40 and M40 groups, but homes with high power demand, particularly significant air conditioning usage, will be subject to charges depending on market rates.

During a press conference following the National Economic Action Council (MTEN) meeting, Anwar stated, "It is important to understand that 90 percent of the population will not experience any increase, but households with excessive electricity consumption, including heavy air conditioning usage, will encounter tariff hikes." Minister of Economy Rafizi Ramli was also present at the conference.

However, the Prime Minister did not specify the timeline for implementing the electricity tariff adjustment or the criteria for categorizing usage as "excessively high." Anwar further explained that the government had already initiated the process of phasing out subsidies earlier this year by rejecting the previous government's proposal to raise electricity prices.

Anwar stated, "Therefore, we will maintain electricity prices for the B40 and M40 groups, and only impose increases on large factories unless they are involved in agriculture or small and medium enterprises (SMEs)."

In February, the Minister of Natural Resources, Environment, and Climate Change, Nik Nazmi Nik Ahmad, reported that the government had allocated RM10.76 billion to subsidize electricity bills for domestic and non-domestic users in the low-voltage (LV) category from January 1 to June 30, 2023. This allocation included users from Micro, Small, and Medium Enterprises (MSMEs), restaurants, grocery stores, small workshops, as well as users in the agricultural category, such as farmers and breeders.

Anwar highlighted that electricity tariffs are reviewed every six months through the Imbalance Cost Pass-Through (ICPT) mechanism, which considers fuel costs and other generation costs over the preceding six-month period.

Nik Nazmi emphasized the need to review subsidies for electricity tariffs for T20 domestic users in the future, as this group has the financial means to afford a more competitive tariff.

He emphasized the importance of targeted subsidies in electricity tariffs to ensure that only eligible groups benefit from them. "We have the ICPT framework to determine electricity tariff rates. We are still protecting and maintaining the same rates for domestic users, including the T20 group," he stated.

"In my opinion, this is something that needs to be reconsidered in the future because when it comes to T20 tariffs, they have higher incomes and should pay more competitive tariffs. For the M40 and B40 groups, I agree that we need to protect them," he added.

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Source: Berita Harian