Malaysians might have been in for a rude awakening as they received their monthly electric bill if the government hadn’t stepped in.
In a generous and unprovoked move, which is always a little suspect in this country, the Ministry of Finance has announced that it will be forking out a total of RM5.8 billion to shoulder/subsidise the increased cost of energy generation needed to keep the lights on. Literally.
Government to subsidise RM5.8 billion of electricity bill
The sum will be paid to utilities provider Tenaga Nasional Berhad (TNB) in return for not raising the current electric tariffs by having to pass the higher cost to the people, at least for the time being.
This should last through the second half of 2022, though the amount isn’t large enough to keep the floodwater at bay as we wade into 2023. Additionally, it has also guaranteed another RM6 billion option in incidental costs to ensure that the electrical grid operates without disruption.
Price of coal main reason for TNB tariff increase
In a statement, the Finance Ministry cited the skyrocketing price of coal as being the chief factor for TNB’s inevitable tariff increase, which has breached USD400 per metric tonne in 2022 compared to early 2021 price of around USD80 per metric tonne.
Inroads and further development will also be made to secure the continued sustainability of Malaysia’s energy supply and electrical grid but revealed no further details of what this could entail.
One thing’s for sure though: our reliance on non-renewable sources such as coal also means we’re at the mercy of market volatility.
For the majority of Malaysians, the increased crude oil prices that have shot up unsubsidised fuel at the pumps are concerning, but only vaguely related to their electricity bill, which will also be on the rise once these sorts of blanket subsidies come to an end.
However, after 2022 this could hamper the adoption rate of electric vehicles as the cost of charging at home (with domestic electricity rates) rises, especially as more buyers are expecting large batteries and long-range per charge to be the norm.