Electricity tariff reduced by up to 5% (updated)

The following news is extracted from "The Star Online" dated 11 February, 2009.


PUTRAJAYA: Malaysians will get to enjoy slightly cheaper electricity beginning next month.

Some 5.2 million domestic users and households will get a 2.54% reduction in electricity tariffs while commercial and industrial users will have their rates cut by 2.7% to 5%.

On average, the price of electricity will come down to 31.31 sen per kWH (kilowatt hour) as compared with 32.5 sen per kWh (kilowatt hour) previously.

Energy, Water and Communications Minister Datuk Shaziman Mansor said the electricity rates would be reviewed again on July 1 and subsequently every six months to ensure that they reflect the global price of gas and coal.


“We hope that this reduction will benefit all users, particularly those in the industrial sector, and help lower their cost of operation during this economic crisis.

“For the domestic users, the Government would have liked to reduce their electricity rates by a bigger margin. However, when we last reviewed the electricity tariffs last July, we only allowed a slight increase in the rates despite the soaring prices of oil and gas at that time,” he said.

Last year, the tariffs were raised by 12% for consumers and 26% for industrial and commercial consumers. The last increase before this was in 2006, when rates were upped by about 14%.

“The reduction today will better reflect market prices. Our energy generation is also by coal, which has not shown any significant reduction in price,” Shaziman said, adding that in fact the price of coal was now at RM307.70 (US$85) per tonne, up from RM271.50 (US$75) per tonne last July.

“Although coal only comprises 28% of electricity generation in the country, the cost of purchase makes up 20% of the entire fuel costs,” he said.

Last week, he had announced that Malaysians might get their electricity rates reduced by between 5% to 10%.

Shaziman said another reason for the lower than expected reduction was that the Government had decided to divert 100 mmscfd (million standard cubic feet per day) supply of gas meant for the electricity sector to the industries starting this year.

“This is meant to spur the economy as well as enhance investors’ confidence in Malaysia.

“It is now up to the Economic Planning Unit and the International Trade and Industry Ministry to decide which industries will benefit from this extra supply of gas,” he said.

Shaziman said the ministry had also received the green light from the Government for the Energy Commission to look into the terms for the renegotiation of existing agreements between Tenaga Nasional Bhd and the independent power producers.

“We want to look into the terms carefully so that we don’t have to backtrack in our renegotiations when something new arises,” he said.

Shaziman said Malaysia was also in discussion with a power company in Indonesia to sell electricity to Sumatra due to the high demand there as well as to reduce the high reserve margin of electricity here.

“We are thinking of building an electricity grid to export power to Sumatra . We already had a couple of meetings with the company PLN,” he said.

Dear Fellow Sarawakians,

Don’t be overjoyed by the above news!!! Eventhough the news did mentioned that the electricity tariff will be reduced for Malaysians. DON’T BE MISLED!!! The reductions are applicable to “SEMENANJUNG ONLY” NOT FOR SARAWAK!!!