Merry Christmas everyone, I hope you like electricity tariff hikes!
It looks like the Madani government has more than just the removal of the blanket fuel subsidy in mind for 2025. According to Tenaga Nasional Bhd (TNB), changes as part of Regulatory Period 4 (RP4) mean that by July 2024, the base electricity tariff is going up by 14.2% to 45.62 sen/kWh. This piece of news was spread via business desks and so the focus on the news has been more technical.
We’re going to avoid all the jargon and keep things really simple: the timing could not be worse for a price hike.
The Madani government has already set mid-2025 as the time period where the blanket fuel subsidy would be lifted. In theory I’m not against the lifting of the blanket fuel subsidy. Becoming too reliant on handouts is a dangerous game and we’ve been hooked on cheap fuel for a very long time. What I am against is everything else attached to this change in policy:
- not allowing a sub-RM100,000 electric vehicle alternative to be imported and sold in Malaysia
- timing it so that Perodua’s sub-RM100,000 arrives after the subsidy is lifted
- not having a clear guideline for targeted subsidies in place
- using the ‘T15’ and non-Malaysians as a strawman for the removal of blanket subsidies
And now we have the arrival of higher tariffs to contend with as well, so even if you have an electric vehicle, chances are you won’t escape the rise of ‘fuel prices’ either. Now I’m not going to pretend I know how much more expensive it’s going to get, but I suppose a 14.2% hike in the base tariff will result in a higher than 14.2% hike in electricity bills, given similar lifestyle habits. Of course if you charge your EV at home, you can expect a hike in your fuel cost as well.
There are solutions in place. The removal of subsidies and the rising of energy costs is a wake up call. Only 3-4 generations of human beings have experienced cheap and accessible energy, and we’ve already taken it for granted. The reality is that this energy comes at a cost and subsidies hide this cost from us. If your electricity bills are already in the 4 figure range and you own a landed property, it’s time to consider converting to solar. Yes, the initial investment can be daunting, but it’s one of those investments that will most likely pay for itself. There are ways to finance this solar conversion that may offset the initial costs.
On the other hand, many Malaysians will have no way out of this price hike. Those living in condos or rented houses will have to cut back on electricity usage or be forced to pay for more to live the same way.
The real question is whether public EV charging will get more expensive. The EV charging game is one that isn’t quite so lucrative as you may think at current rates. Tesla and a few other EV brands are already offering free charging as an incentive to purchase their vehicles. Perhaps 2025 is the year some of these charging packages are reconsidered as electricity costs skyrocket?
