No electricity tariff hike, for now
UPDATED 5.21PM
The energy minister says his deputy was mistaken about plans to raise electricity prices by next year.
The federal government is still studying a proposal to passing the rising cost of fuel prices to consumers, thus there is no plans to hike up electricity tariffs for now.
Energy, Green Technology and Water Minister Maximus Ongkili (right) said the government still need to determine some key issues behind the Fuel Cost Pass Through (FCPT) mechanism before implementing it.
“We have not made the decision yet to increase the tariff, or to let go, pass through and who should absolve the fuel cost,” he told a press conference in Kuala Lumpur today.
On Monday, his deputy Mahdzir Khalid was reported as saying that Tenaga Nasional Berhad (TNB) will implement the FCPT mechanism next year as a process to determine electricity tariff more efficiently for the consumers.
Asked to comment on this, Maximus said : “Its a question that government yet to decide... I think he has corrected the statement.
“And the issue of whether we want to pass it to the consumers, and how much and when, its the decision of cabinet which has yet to (undertake).”
However, he said whatever the outcome, the government will ensure that the low-income groups will not be affected under the new scheme.
No subsidies to IPPs
Currently, Tenaga Nasional Berhad (TNB) purchases power from independent power producers (IPP) while the latter purchases the fuel to generate power from Petroliam Nasional Bhd (Petronas) at discounted price.
Critics, in particular the opposition, had always claimed that fuel subsidies enjoyed by IPPs and TNB are as high as RM19 billion and formed the bulk of subsidies dished out by the government.
This was denied by former Energy Minister Peter Chin (left) who claimed that the RM19 billion is profit which Petronas had to forgo by selling gas below market price to IPPs and TNB.
The FCPT mechanism was introduced by the government in 2011. According to previous reports, Chin had said this mechanism will determine electricity tariff rates in the future.
It was speculated that Malaysians may have to endure an increase in electricity tariff every six months over the next years, in tandem with a scheduled increase in natural gas price sold by Petronas to the power producers.
However, Chin had since denied this and clarified that the plan was only to review the gas price under the FCPT mechanism every six months, only after which will the government decide on whether to increase the tariffs.
