Electricity Rebate Removed For Household With Heavy Electric Usage

As part of their ongoing efforts to retarget subsidies, the government has decided to remove the electricity rebate for households with electricity bills above RM220 in 2024.

However, the government also decided to keep the electricity tariff unchanged for its industrial and commercial users, at least for the first half of 2024.

In the new revised subsidy mechanism, households with an electricity usage of 600 kilowatt hour (kWh) to 1,500 kWh, which translates to an electricity bill of RM200 to RM707 monthly, will not enjoy the current RM0.02 per kWh rebate.

However, this is not really something for these affected households to worry about, as according to the energy commission, it will only mean an increase of 4.2% to 6%, which amounts to an additional RM12 to RM32. Furthermore, it is estimated that these changes will only affect 15% of all households in Malaysia.

But, these households will still continue to receive the 10 sen per kWh surcharge discount, which is applicable since July 2023 to households consuming over 1,500 kWh of electricity per month.

According to The Edge, the move to reduce the number of households enjoying the electricity rebate will mean that the government will only spend RM1.9 billion in electricity discounts for the first half of 2024, a relatively lower number compared to the RM5.2 billion spent in the second half of 2023.

Meanwhile, the Small and Medium Enterprises Association of Malaysia have lauded the government’s move to keep the electricity tariff for industrial and commercial users, but remains concerned about the uncertainty that the Imbalance Cost Pass-Through (ICPT) mechanism might bring.

“The energy costs remain a major concern for small and medium enterprises, and while we support the energy transition roadmap, we must be careful that any incremental costs are gradual and supportive of growth,” he told Bernama.