Electricity tariff cut not enough, says Malaysia consumers' association

PETALING JAYA: The Federation of Malaysian Consumers Association (Fomca) has welcomed the reduction in electricity cost but feels the cut is insignificant.

It wanted a 10 per cent reduction on the average power charge based on international fuel prices, pointing out that the proposed reduction, which was from March 1 to June 30, was only 5.8 per cent.

"We want the 10 per cent reduction to be enforced throughout the year because a four-month implementation period is too short to see the actual savings for the people or for businesses to adapt," said its president Datuk Marimuthu Nadason.

Fomca urged the Government to reveal the cost of producing 1kWh of electricity based on the actual rate and to explain how it arrived at a reduction of 5.8 per cent.

"We also want to know how much savings can be achieved by a consumer based on the reduction and by how much the prices of goods will come down," Marimuthu said.

Fomca has started an online petition urging Putrajaya to reduce the electricity cost by 10 per cent and to implement that throughout the year.

Businesses and industries welcome lower rates

Businesses and industries generally welcomed the lower electricity costs announced by the Government although not all were clear over the extent of its impact.

SME Malaysia association president Teh Kee Sin said the reduction was much lower than they expected, considering the drop in crude oil price to about half the rate it was when the electricity tariff was last revised in January last year.

"As the crude oil price is low, and now that the electricity charges are also going to be lowered, I hope SMEs will take this as a reason to lower their prices.

"However, I cannot be certain of how much they can lower their prices because there are at least two other factors to consider, which is minimum wages and the depreciation of the ringgit," he said when contacted.

Teh urged Tenaga Nasional Berhad (TNB) to look into their suggestions about off peak tariff rates, which would encourage SMEs to shift some of their business activity into the off peak period.

"Off peak is between 11pm and 7am, and rates can be lowered during that time because there is not much consumption.

Federation of Malaysian Manu­facturers president Datuk Seri Saw Choo Boon said any reduction of electricity tariffs by the government was welcomed although it would not have a significant impact on total manufacturing cost.

Saw said electricity typically constituted up to 10 per cent of manufacturing cost although there are some sectors that use more.

"The 2.25sen (S$0.08)/ kWh or about 6 per cent reduction in electricity tariffs would amount to 0.6 per cent reduction in manufacturing cost for most manufacturers," he said

Malaysian Associated Indian Chamber of Commerce and Industry president Tan Sri K.K. Eswaran said the move showed that the Government was indeed listening to calls from the public and the business community for lower electricity rates.

The Malaysian Rubber Glove Manufacturers Association said the tariff reduction was anticipated.

"This would help relieve the glove companies of some of the general costs that have increased due to the strengthening of the US dollars, as electricity in terms of energy usage is the largest after gas," said president Lim Kwee Shyan.