Finance Ministry says will stomach RM5.8b to keep power tariff at current rate despite higher costs

·1-min read
Malay Mail
Malay Mail

KUALA LUMPUR, Aug 27 — The Ministry of Finance today announced that it will pay RM5.8 billion to national power company Tenaga Nasional Berhad (TNB) to maintain electricity tariffs at the current rate so as not to burden Malaysians.

“The government will pay the RM5.8 billion to TNB to make sure TNB is not adversely affected by the sharp surge in energy prices for power generation in line with the Incentive Based Regulation,” the ministry said in a statement.

It disclosed that coal increased to US$400 (RM1,787) a metric tonne in the middle of this year, up from US$80 a metric tonne previously.

“As such, the government will have to pay RM5.8 billion in electricity subsidies so that it could benefit all members of Keluarga Malaysia,” it said.

Prime Minister Datuk Seri Ismail Sabri Yaakob, who introduced the Keluarga Malaysia slogan last year to mark his inclusive policy, previously said his government would raise subsidies to avert a power tariff hike for the remaining year.

Pundits described the decision as an attempt to quell public discontent with rising prices ahead of the general election.

Global energy costs have shot up to record levels as a result of Russia's invasion of Ukraine and worsened by prolonged supply chain disruptions.

The Finance Ministry said it would guarantee TNB a payment of up to RM6 billion to buffer against future shocks on its operations.