July 2, 2022
Malaysia might see yet another rise in electricity tariffs due to a number of major factors that lead to energy production. Right now, global energy prices are on a steep rise thanks to a surge of demand, disruptions in fuel supply, and the ever-increasing headache revolving around the shortages of oil, gas, and coal. These are all affecting Tenaga Nasional Berhad's (TNB) energy production costs and the possibility of higher tariff rates for all households is more apparent than ever. Several countries have already revised their tariffs to 'weather out the storm' and Malaysia won't be able to ignore this for long. *Image credit: TNB What does coal have to do with this? Around 59% of Malaysia's electricity generation lies in the use of coal. As of May 2022, the price for coal has risen to USD434 (MYR1,910) per tonne. That's quite a rise compared to the end of 2021 when the price was at USD200 (RM880) per tonne - over 200% increase in the past six months. While the Malaysian government might be able to do something like target subsidies for the lower-income groups, other experts in the field have suggested that the possible hike should be covered by electricity companies like TNB due to them earning higher revenues after the lockdown (and constant revenue streaming in during the MCO). *Image credit: TNB Will it affect other prices? Tariff increases also correlate directly to higher inflation, which also means that everything else will go up in terms of prices. From groceries to cars, it is an unavoidable circumstance. Using EV charging as an example, those who are planning to get some of that juicy DC fast charging service at BMW dealerships can expect to pay up from RM0.80 to RM1.80 per minute depending on the charging station spec and whether you're a BMW owner. After 30 minutes? Yup, do the math and let that sink in for a bit and imagine what'll happen when that pain-in-the-behind tariff is hiked up. And that's for those who can afford the luxury. What we have to worry about are those who are in the lower-income groups.

Malaysia might see yet another rise in electricity tariffs due to a number of major factors that lead to energy production.

Right now, global energy prices are on a steep rise thanks to a surge of demand, disruptions in fuel supply, and the ever-increasing headache revolving around the shortages of oil, gas, and coal.

These are all affecting Tenaga Nasional Berhad’s (TNB) energy production costs and the possibility of higher tariff rates for all households is more apparent than ever. Several countries have already revised their tariffs to ‘weather out the storm’ and Malaysia won’t be able to ignore this for long.

*Image credit: TNB

What does coal have to do with this?

Around 59% of Malaysia’s electricity generation lies in the use of coal. As of May 2022, the price for coal has risen to USD434 (MYR1,910) per tonne. That’s quite a rise compared to the end of 2021 when the price was at USD200 (RM880) per tonne – over 200% increase in the past six months.

While the Malaysian government might be able to do something like target subsidies for the lower-income groups, other experts in the field have suggested that the possible hike should be covered by electricity companies like TNB due to them earning higher revenues after the lockdown (and constant revenue streaming in during the MCO).

*Image credit: TNB

Will it affect other prices?

Tariff increases also correlate directly to higher inflation, which also means that everything else will go up in terms of prices. From groceries to cars, it is an unavoidable circumstance.

Using EV charging as an example, those who are planning to get some of that juicy DC fast charging service at BMW dealerships can expect to pay up from RM0.80 to RM1.80 per minute depending on the charging station spec and whether you’re a BMW owner.

After 30 minutes? Yup, do the math and let that sink in for a bit and imagine what’ll happen when that pain-in-the-behind tariff is hiked up. And that’s for those who can afford the luxury. What we have to worry about are those who are in the lower-income groups.

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