Malaysia to study new electricity tariff structure for next year

The Malaysian government is reviewing a new electricity tariff structure for implementation next year, which includes a ‘user pay’ concept. Deputy Prime Minister and Minister of Energy Transition and Water Transformation, Datuk Seri Fadillah Yusof, stated in the Dewan Rakyat that the Energy Commission (ST) has been tasked with conducting detailed studies to evaluate this approach.

The proposed system aims to differentiate tariff rates between domestic consumers and industrial sectors based on usage patterns. This is intended to ensure a fairer distribution of costs and protect domestic users. Fadillah noted that those with high energy consumption, such as industrial sectors and data centers, would be expected to pay more.

Regarding recent increases in electricity bills, Fadillah attributed the rise to global fuel cost increases caused by geopolitical tensions in West Asia, specifically security disruptions in the Strait of Hormuz affecting gas and coal prices. Additionally, prolonged hot weather has increased demand for air conditioning, while reduced hydroelectric generation and scheduled coal plant maintenance have increased reliance on more expensive imported liquefied natural gas (LNG).

To mitigate the impact on citizens, the government previously announced an expansion of electricity bill protection for domestic users with monthly consumption up to 800 kWh, covering approximately 90 percent of domestic users in Peninsular Malaysia.