Rafizi: New Electricity Tariff Hike Will Burden the People
By Aidil Syukri, Malaysian Digest
KUALA LUMPUR, 31 MAY, 2011: PKR Strategic Director Rafizi Ramli today said the government’s announcement to reduce electricity subsidy will only burden the people while Tenaga Nasional Berhad (TNB) and IPPs (Independent Power Producer) still enjoy the same profits.
According to Rafizi, the announcement of an electricity tariff hike does not come as a surprise to the public as it was made in order to confront the largesse of the elite political-business group that had profited tremendously at the expense of the public by dismantling lopsided agreements that have long caused structural damages to the economy.
Rafizi said, Barisan Nasional (BN) has proven time and time again that it lacks courage and political will to undo the crony-capitalism from which it has benefited for a long time.
“BN claims that the tariff hike will not affect 4.4 million households as the tariff for the usage of 300 kWh per month and below is left unchanged. The monthly electricity bill for the households may not increase much as a result of the tariff hike, but their disposable income will definitely be affected by the ever rising inflation,” said Rafizi.
“There are also other households or dwellings (including accommodations shared by the students or workers) whose monthly electricity bill is above RM77 a month which will be affected directly by the tariff hike,” he added.
The last time the tariff was reviewed that affects the majority of domestic customers was in June 2006. The baseline tariff for the first 200 kWh per month was also maintained at the current 21.8 sen per kWh.
“In spite of this, 2006 saw the second highest inflation rate for the second half of the last decade at 3.6%,” he said.
According to Rafizi, the only time when price increase was higher was in 2008 during the sudden petrol and diesel hike.
A closer look at the inflation data in 2006 will reveal that a combination of electricity tariff and petrol/diesel price hikes was the main factor that had led to the increase in inflation.
“BN is repeating the same prescription in 2006 for 2011- a combination of price increases for basic goods that include sugar, petrol, diesel and now electricity. The combined effect of this will see the inflation for 2011 surpassing that of 2006 and inflict difficulties to millions of households whose meagre disposable income will be reduced further,” he added.
“The public does not need a unilateral withdrawal of subsidies that cause these price hikes. Any responsible government facing a dual deficit and inflation crisis in Putrajaya should summon all the political will and moral courage to go to the root cause of these problems,” he added.
“The power generation sector in this country is shackled with the legacy of lopsided agreements which continue to exact economic pains on the public. TNB has to buy electricity at the much higher rate than its own cost from IPPs,” he added.
He said, in order to balance the price, TNB and IPPs were given huge gas subsidies borne by PETRONAS each year.
“All in all, the result is constant that TNB achieves a status quo financially, the public bears the burden from the tariff hike and IPP is not affected at all from thus exercise due to the fuel pass through mechanism,” he said.
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