FMM hopeful govt will maintain current electricity rates

KUALA LUMPUR: The Federation of Malaysian Manufacturers (FMM) is hopeful that the Pakatan Harapan government would maintain the current electricity tariff rates in Peninsular Malaysia for Jan 1, 2018 up to Dec 31, 2020 period.

“We are also concerned whether there would be an increase in electricity tariff rates due to any adjustments to the natural gas tariff for the power sector,” it said.

The average effective tariff of natural gas for non-power users, including the manufacturing sector, will be increased from July 1, 2018 to RM32.69 per mmBtu (one million British thermal units) from RM32.52 per mmBtu currently.

“While FMM is steadfast in its commitment towards energy subsidy rationalisation and although the 0.5 per cent increase is lower than the previous period’s 22.97 per cent, it is nevertheless still an increase in energy costs,” it said in a statement yesterday.

Considering that the new surcharge at RM0.77 per mmBtu is much lower, that is, only 48 per cent of the previous period’s surcharge of RM1.62 per mmBtu and that numerous concurrent cost increases have already been imposed on businesses, the federation strongly urged the new government to maintain current electricity tariff rates, which would help to relieve the energy cost burden on the manufacturing sector as well as to benefit the people as household consumers.

FMM also urged the government to hold on to the Incentive Based Regulation framework through the Imbalance Cost Pass Through mechanism until 2020 in order to help sustain the competitiveness of businesses especially the small and medium enterprises without further increases in energy costs. — Bernama