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Electricity bill subsidies cost govt RM10.76bln for H1 2023

KUALA LUMPUR: The government has allocated RM10.76 billion to cover electricity bill subsidies for domestic and non-domestic consumers in the low voltage (LV) category from Jan 1 to June 30, 2023.

Natural Resources, Environment and Climate Change Minster, Nik Nazmi Nik Ahmad said this covers users from Micro, Small and Medium Enterprises (MSMEs), restaurants, retail stores, small workshops as well as farmers, breeders, and smallholders in agriculture.

"This means that 9.5 million electricity users who represent 99 per cent of all users in Peninsular Malaysia will not be affected by the increase in fuel costs for electricity generation," he said when winding up debate on the Supply Bill 2023 in the Dewan Rakyat, today.

Earlier, Nik Nazmi said electricity tariffs are reviewed every six months through the Imbalance Cost Pass-Through (ICPT) mechanism taking into account fuel costs and other generation costs for the past six months.

He said in this matter, the cost of ICPT for the period from July to December 2022 was RM16.16 billion, equivalent to a surcharge rate of 27 sen/kWh which should be imposed on all users for the period from January to June 2023.

However, he said the government has agreed to only pass on a surcharge of 20 sen/kWh to industrial and commercial users (High Voltage - HV and Medium Voltage - MV) for the period from Jan 1 to June 30, 2023 and the remaining surcharge of 7 sen/kWh equivalent to RM1.93 billion would be accommodated by the government.

"If the government wants to maintain the surcharge of 3.7 sen/kWh to industrial and commercial users of MV and HV, an additional cost of RM4.2 billion will have to be borne by the government in the form of subsidies for the same period," he said. -- BERNAMA

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