Global energy shock now hitting Malaysia’s electricity costs, says economy minister

Global energy supply disruptions are now causing indirect effects on Malaysia's electricity costs, according to Economy Minister Akmal Nasrullah Mohd Nasir. Last March, the petrol market saw the initial impact, which is now gradually affecting natural gas and coal. The minister noted that this lagging effect is starting to influence electricity generation costs, particularly for households consuming more than 600 kilowatt-hours (kWh) per month.

The fluctuations impacting these consumers are linked to fuel costs, known as the Automated Fuel Adjustment (AFA), which reflects fuel prices.

Akmal explained that natural gas, used for energy generation, typically experiences a three-to-four-month delay in being affected by petrol price changes. The minister emphasized that the current tariff-setting mechanism is designed to protect small-scale domestic consumers from direct financial impact. However, he acknowledged that under the existing tariff structure, most households using below 600 kWh per month are not directly affected by the tariff position or fuel costs.

To mitigate the consequences of the global energy crisis, the Prime Minister will convene a special meeting to reassess the tariff situation and alleviate people's burdens. The minister also highlighted that unfavorable weather conditions are indirectly contributing to increased daily energy consumption, as people tend to remain indoors during adverse weather.