THE Malaysian economy is still in the process of revival and has yet to even recover from the Covid-19 pandemic’s challenges, but we have now been afflicted by the deadly shocker of an immense 540% increase in the electricity surcharges (from 3.7sen to 20sen), albeit not for small- and medium-sized enterprises and residential consumers.
With this surcharge, the electricity bills of larger commercial consumers is expected to increase imminently and immediately of between 25% to 30%, depending on the electricity tariff class.
As electricity comprises a very significant component of operational costs, it will mean an immediate and immense hike in operational costs once again since the last electricity surcharge in March this year.
It must be understood that our industry has, by no means, fully recovered from the drastic impact of the pandemic the past two years.
Industry players are still reeling from the prospect that our operational costs will increase exponentially in view of the current inflationary hikes in all input costs, compounded with increase in wages and shortage of labour and the forecasted recession expected in 2023.
As the increase in electricity is due to the transient cost of petrol and gas due to the Ukraine war, which is temporary in nature, coupled with the fact that any price increase of goods and services, once increased would not retreat when the situation normalises, we believe the government should bear any temporary subsidies deemed necessary and not pass the temporary hikes to the production sector and, ultimately, to the consumers.
The estimated 25% to 30% hike in cost of electricity from the surcharge is far too substantial to be absorbed and has ultimately to be passed on to consumers, resulting in even higher costs of living and the resultant compounding effect.
Due to this increased cost of doing business in our industry, especially when we do not have sufficient time to adjust and adapt, our rakyat’s disposable incomes will be negatively impacted.
We might have survived the pandemic, but are not sure we will survive this “electric shock”. We sincerely urge the government to reconsider the increase in electricity surcharge for the greater good of the national economic recovery. – The Vibes, December 23, 2022
This joint statement was issued by:
- Building Management Association of Malaysia
- Persatuan Pengurusan Kompleks Malaysia
- Malaysia Shopping Malls Association
- Federation of Malaysian Business Associations
- Malaysian Association of Theme Parks & Family Attractions
- Bumiputra Retailers’ Organisation
- Malaysia Retailers’ Association
