KUALA LUMPUR (Dec 30): The Malaysia Retailers Association (MRA) has expressed concerns about the government’s decision to increase the base electricity tariff, arguing that it will negatively impact the country’s competitiveness and economic recovery.
In a statement released on Monday, the association is strongly urging the government to reconsider the electricity tariff hike, scheduled to take effect from July 2025, and to hold immediate dialogues with stakeholders to address their concerns and explore alternative solutions.
According to MRA, higher electricity bills will increase operational costs for retailers and consumers, further fuelling inflation and consequently reducing consumer spending.
It also pointed out that this tariff hike comes on top of other existing and planned cost increases that the retail industry is facing.
These include a planned increase in the minimum wage, payroll costs due to mandatory Employees Provident Fund (EPF) contributions for non-citizen employees, an increase in service tax, expenses related to the implementation of e-invoices, the impact of amendments to the Employment Act, and global economic uncertainties.
These costs, combined with a significant rise in electricity tariffs, would lead to higher operational expenses for businesses, which will be inevitably be passed on to consumers, the MRA said.
“The retail industry fears that this will exacerbate inflation, reduce consumer spending, and threaten Malaysia’s competitiveness and economic recovery,” it added.
Last Thursday, Tenaga Nasional Bhd (TNB) announced that the base electricity tariff for Peninsular Malaysia would be set at 45.62 sen per kilowatt hour under Regulatory Period 4 (RP4) between 2025 and 2027, a 14.2% increase from the tariff under RP3 in 2022-2024.
The MRA argues that burdening businesses and consumers with this electricity tariff hike is “irrational”, especially considering TNB’s “impressive” net profits in the second and third quarters of the financial year ending Dec 31, 2024.
“The MRA urges TNB to reinvest portions of its large profits to cover their operational and maintenance costs, rather than passing these costs onto the Malaysian public and consumers,” the association said.
“Furthermore, as a monopoly of electrical supply, TNB’s position leaves businesses and consumers with no alternative. Clearer, rational justifications are needed to ensure fair and equitable pricing of electricity for the Malaysian public and consumers,” it added.
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Source: EdgeProp.my
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