The Federation of Malaysian Manufacturers (FMM) notes that the average effective tariff of natural gas for non-power users, including the manufacturing sector will be increased from July 1, 2018 to RM32.69 per mmBtu from RM32.52 per mmBtu, currently.
While FMM is steadfast in its commitment towards energy subsidy rationalisation and although the 0.5% increase is lower than the previous period’s 22.97%, it is nevertheless still an increase in energy costs.
We are also concerned whether there would be an increase in electricity tariff rates due to any adjustments to the natural gas tariff for the power sector. FMM hopes that the new Government would uphold the past Cabinet's decision, announced on December 26, 2017, to maintain current electricity tariff rates in Peninsular Malaysia for January 1, 2018 up to December 31, 2020. The December 2017 decision also resulted in the Government having to bear an electricity tariff rebate of 1.80 sen per kWh for the period January 1 to June 30, 2018.
Considering that the new surcharge at RM0.77 per mmBtu is much lower, i.e. only 48% of the previous period’s surcharge of RM1.62 per mmBtu and that numerous concurrent cost increases have already been imposed on businesses, FMM would strongly urge the new Government to maintain current electricity tariff rates, which would help to relieve the energy cost burden on the manufacturing sector as well as to benefit the rakyat as household consumers.
FMM urges the Government to hold on to the Incentive Based Regulation (IBR) through the Imbalance Cost Pass Through (ICPT) until 2020 in order to help sustain the competitiveness of businesses especially SMEs without further increases in energy costs.
June 18, 2018
FMM Advocates Transparency, Integrity and No Corruption
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About FMM
The Federation of Malaysian Manufacturers (FMM) has been the voice of the Malaysian manufacturing sector since 1968. Representing over 10,000 member companies (3,000 direct and 7,000 indirect) from the manufacturing supply chain, FMM is actively engaged with government and its key agencies at Federal, State and local levels. FMM is also well-linked with international organisations, Malaysian businesses and civil society. Apart from benefitting from FMM’s advocacy, FMM members enjoy value-add services, including training, business networking and trade opportunities as well as regular information updates.
Media Enquiries:
Esther Boey, Senior Manager, Research & Communication
Tel : 03-6286 7200 | Email: eboey@fmm.org.my / webmaster@fmm.org.my