GEORGE TOWN: The Consumers' Association of Penang (CAP) has lauded Prime Minister Datuk Seri Anwar Ibrahim's recent announcement that households which guzzle electricity will no longer be enjoying subsidies.
CAP president Mohideen Abdul Kader said, according to a media report in August last year, the government was expected to spend RM6.51 billion in electricity tariff subsidies for that year.
He said under across-the-board subsidies, the affluent Top 20 (T20) of the population would benefit more than the Bottom 40 (B40) and Middle 40 (M40) households because they consume more electricity by using power-hungry electrical appliances such as air-conditioners.
"Therefore, we agree that T20 households using numerous and high energy-consuming appliances should pay non-subsidised electricity rates.
"If they want to cut the cost of their electricity consumption, they can have the option to install solar panels.
"The government is heading in the right direction in continuing its targetted subsidies of the B40 and M40 households while those in T20 can pay for their luxurious lifestyle or otherwise have to scale it down," he said today.
Elaborating, Mohideen said when electricity prices (in September 2022) were compared across nine of the 10 Asean countries, Malaysia's household electricity was the third cheapest after Myanmar and Laos.
Mohideen said CAP also agreed with the suggestion that subsidised rates for B40 and M40 households would be maintained by way of offsetting the cost by charging higher rates for major factories.
"Those in the agriculture sector or SMEs will be spared any increase.
"Those in high-value manufacturing can pay more for electricity.
"The entire objective of targetted subsidies is to ensure that whatever subsidies given by the government have to benefit the right category of people and also drastically reduce leakages," he added.
He noted that Malaysia needed to produce high-quality graduates to meet the needs of knowledge industries as evidenced by the Bayan Lepas Free Industrial Zone, which started in the early 1970s.
The latest available statistics on micro-, small and medium-sized enterprises (MSMEs) showed that there are 1,258,763 establishments contributing to 37.4 per cent of Malaysia's overall gross domestic product (GDP).
MSMEs will not be affected by the increase.
It will also be the same for the critical agricultural sector which the country urgently needs to stimulate for food production.
It was reported that households with high electricity consumption would no longer enjoy government subsidies.
Anwar said recently that households, such as those that used three fans and four air conditioners, should pay the actual cost of consumption.
"It needs to be understood that there will be no increase for 90 per cent of the people, but there will be a tariff increase for households that use excessive electricity such as multiple air conditioners," he had told reporters after chairing the National Economic Action Council (MTEN) meeting.
He did not specify the exact implementation date for the electricity tariff adjustment or the amount of usage that would be categorised as "very high".
In early March, Natural Resources, Environment and Climate Change Minister Nik Nazmi Nik Ahmad said the government had 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.