2027 power subsidy plan under review: Treasury sec-gen

The Malaysian government is currently reviewing the electricity subsidy scheme for 2027 in collaboration with Tenaga Nasional Bhd (TNB) and the Energy Commission. The Treasury secretary-general, Tan Sri Johan Mahmood Merican, stated that the finalization of implementation parameters and funding arrangements is still pending. The existing subsidy mechanism, which is set to expire on December 31, aims to shield approximately 85% of households from higher electricity costs.

However, Johan explained that the increase in subsidy protection was necessary due to a rise in electricity consumption during hot weather and haze events, causing some consumers to exceed the previous monthly threshold of 600 kilowatt-hours (kWh) and face significantly higher bills. The government is currently deliberating on the approach to take, including the parameters for the upcoming year and the extent to which costs will be shouldered by the government or through adjustment mechanisms.

During a post-2027 Budget debate, Johan responded to inquiries and clarified that the decision on the electricity subsidy mechanism for the following year and the cost-sharing arrangement between the government and TNB had not been finalized. In September, Prime Minister Datuk Seri Anwar Ibrahim announced that the electricity bill protection threshold for residential customers would be increased from 600kWh to 800kWh per month.

This move was implemented to alleviate the financial strain on households facing higher electricity bills, exempting those consuming up to 800kWh a month from the automatic fuel cost adjustment charge, the eight percent sales and service charge, and retail charges.