Electricity subsidies in Malaysia may end soon – will charging EVs at home be more expensive soon?

Electricity subsidies in Malaysia may end soon – will charging EVs at home be more expensive soon?

The government has agreed to continue offering a two sen per kWh electricity rebate to domestic users until the end of 2022, according to a report by The Star. Speaking in the Dewan Rakyat yesterday, energy and natural resources minister Datuk Seri Takiyuddin Hassan said the decision will see the government foot a subsidy bill of RM5.8 billion from July 1 to December 31 this year.

He added that the surcharge for non-domestic users will remain at 3.70 sen/kWh, which is lower than the actual of rate of Imbalance Cost Pass-Through (ICPT) of 11.81 sen/kWh. ICPT is a mechanism under the Incentive Based Regulation (IBR) framework which allows for Tenaga Nasional (TNB) to reflect changes in fuel and other energy generation-related costs in the electricity tariff.

These costs are set based on benchmarked prices in the base tariff, and the implementation of ICPT, which is reviewed every six months, would reflect the actual costs in tariff in from of rebate or surcharge. For example, if coal and/or gas prices go up, there’s a surcharge, and vice versa.

Referring to TNB’s FAQ on ICPT, for the period of January 1 to June 30, 2022, there was an additional fuel and other generation costs amounting to RM7 billion. To cover the costs, the government allocated RM2.3 billion as well as another RM3.5 billion to ensure the ICPT surcharge is maintained for all non-domestic customers such as commercial and industrial – the total subsidy bill was RM5.8 billion.

As it stands, from July 1 to December 31, 2022, domestic customers will still enjoy an ICPT rebate of 2 sen/kWh, while non-domestic users are faced with an ICPT surcharge of 3.70 sen/kWh. However, Takiyuddin said yesterday that electricity subsidies, including those for lower income groups (E-Kasih programme), can’t go on indefinitely and may be removed in the future.

From a motoring perspective, owners of EVs and PHEVs who regularly charge their cars at home may have to pay more to “refuel” in the future should subsidies be removed. You can forecast your electricity bill using the Energy Commission’s handy online calculator and deduce how much might have to pay should the ICPT rebate be removed or switched to a surcharge.

Similarly, an even higher ICPT surcharge for non-domestic customers could result in providers of public charging facilities increasing the rates charged to users. One potential workaround is to introduce affordable EV charging rates, as proposed by prime minister Datuk Seri Ismail Sabri Yaakob during the launch of the 2022 Perodua Alza yesterday.

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Gerard Lye

Originating from the corporate world with a background in finance and economics, Gerard’s strong love for cars led him to take the plunge into the automotive media industry. It was only then did he realise that there are more things to a car than just horsepower count.

 

Comments

  • Nothing is cheap nowadays.

    Like or Dislike: Thumb up 6 Thumb down 1
  • Bobby on Jul 21, 2022 at 10:39 am

    But petrol car now. Don’t get Battery car yet. Now is a transition period and getting Battery car sure is a high risk.

    More over, our fuel price is very low compare to other.

    Like or Dislike: Thumb up 3 Thumb down 4
  • the driver on Jul 21, 2022 at 10:44 am

    The gov’t is experiencing a catch-22 situation. How does it encourage users to electric vehicles when fuel prices are heavily subsidized? As it is, electric vehicles will remain a rich person’s game.

    Like or Dislike: Thumb up 1 Thumb down 2
  • Petrol on Jul 21, 2022 at 10:51 am

    EV users are shaking right now hahah

    Like or Dislike: Thumb up 6 Thumb down 7
  • Kea Was on Jul 21, 2022 at 11:30 am

    The video only shows the problem here in Malaysia when you monopolise only the customer ends up losing as you do not have a choice and accept only la.

    Seriously wondering how can Malaysia ever be clean if we rely on so much Coal to generate electricity or just blame on others to do more.

    Like or Dislike: Thumb up 4 Thumb down 6
    • Oh waiii on Jul 22, 2022 at 12:41 am

      Go nuclear… oh waiiii…

      Like or Dislike: Thumb up 2 Thumb down 1
      • No use cos people will always complaints and other people will always manupulate.

        Like or Dislike: Thumb up 0 Thumb down 0
    • SmartConsumer on Jul 22, 2022 at 8:07 am

      we don’t use much coal. Most of our energy are generated from clean Gas

      Like or Dislike: Thumb up 1 Thumb down 2
  • Malaysian Citizen on Jul 21, 2022 at 11:54 am

    Weak government

    Like or Dislike: Thumb up 1 Thumb down 4
    • A weak government would go bankrupt without helping its rakyat as with Sri Lanka. We are far far from it.

      Like or Dislike: Thumb up 2 Thumb down 0
  • Mike Tee on Jul 21, 2022 at 4:01 pm

    Unless I misunderstood the EC calculator website, I get RM0.50 per 100km charge (25kwh) from ICPT rebates. So RM2 extra for 400km full charge or thereabouts when ICPT rebates are removed?

    Like or Dislike: Thumb up 1 Thumb down 0
  • ROTI CANAI on Jul 21, 2022 at 11:03 pm

    yea, gonna keep driving fossil fuels

    Like or Dislike: Thumb up 2 Thumb down 0
 

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