KUALA LUMPUR (June 18): The Federation of Malaysian Manufacturers (FMM) is urging the Pakatan Harapan government to maintain the current electricity tariff rates, to help relieve energy cost burden on the manufacturing sector.

This came after the average effective tariff of natural gas for non-power users, including the manufacturing sector, was revised to RM32.69 per mmBtu starting next month, from RM32.52 per mmBtu currently.

"While FMM is steadfast in its commitment towards energy subsidy rationalisation and although the 0.5% increase is lower than the previous period's 22.97%, it is nevertheless still an increase in energy costs.

"We are concerned whether there would be an increase in electricity tariff rates due to any adjustments to the natural gas tariff for the power sector," it said in a statement today.

"Considering that the new surcharge at RM0.77 per mmBtu is much lower, i.e. only 48% of the previous period's surcharge of RM1.62 per mmBtu and that numerous concurrent cost increases have already been imposed on businesses, FMM would strongly urge the new government to maintain current electricity tariff rates, which would help to relieve the energy cost burden on the manufacturing sector as well as to benefit the rakyat as household consumers," it said.

As such, the Federation calls for the government to uphold the past Cabinet's decision to maintain current electricity tariff rates in Peninsular Malaysia for Jan 1, 2018 up to Dec 31, 2020.

It is also urging for the government to hold on to the incentive-based regulation through the imbalance cost pass through until 2020, to help sustain the competitiveness of businesses, especially SMEs, without further increases in energy costs.

On June 13, Gas Malaysia Bhd announced the average natural gas base tariff as set at RM31.92 per mmBtu, for the period beginning July to December 2018.

Under the gas cost past through mechanism, a surcharge of RM0.77 per mmBtu will apply to all tariff categories — due to the higher actual gas costs against the reference gas costs in the base tariff in this period — which translates to an average effective tariff of RM32.69 per mmBtu.

FMM represents over 10,000 member companies, both direct and indirect, from the manufacturing supply chain.