Malaysia Cuts Electricity Tariff

The global supply of electricity has always been an important issue and a topic that draws consumers in. Electricity has become one of the fundamental needs of human beings. A steady supply of this power is needed for things to run smoothly in this sophisticated world. Electricians and electrical services of companies are also sought after these days. One would need the assistance and skills of a professional in installing, repairing and maintaining electrical systems be it in households, office buildings or stadiums.

In order to efficiently provide electricity to consumers, power generators and distributors worldwide have been in constant research and development of ways that will lower the cost of electricity as well as provide clean and safe electricity to end users.

Recently some Asian countries have announced that they will be cutting off their electricity tariffs. Among those are Singapore and Malaysia. The Minister of Energy of Malaysia was recently quoted announcing via Bloomberg that Green Technology and Water will be cutting off electricity tariffs. This pronouncement is effective March 1 until June 30.

What contributed to Malaysia’s lowered electricity tariff? The electricity generation costs of Malaysia have significantly lowered since coal was used.

In accordance with a report from Malaysian authorities, the cuts in Peninsula Malaysia amounted to an average of 2.25s en/kWh. In the Sabah and Labuan areas, the cut amounted to an average of 1.20s en/kWh. The cuts projected are for both the commercial and industrial users. The domestic consumers will also be enjoying the lowered tariffs if they use more than 300kWH.

According to the spokesperson in Malaysia, the tariff cuts represent an average of 5.8 percent for those paying 38.53s en/kWh and an average of 3.5 percent cut for those paying the amount 34.52s en/kWh.

With this report, it is still not clear whether there will be a fiscal impact as it is likely that the government will pass the savings on cost to the consumers.

The report is also unlikely to materially affect the inflation assessment made by Bank Negara Malaysia. Experts are expecting no changes in the rates this year. The CPI weight of the electrical sector is only 2.88 percent thus it will not have direct impact on inflation.