Published February 12, 2009

Malaysia to cut electricity tariffs by average 3.7%

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(PUTRAJAYA, Malaysia) Malaysia is to cut electricity prices by an average of 3.7 per cent from March 1 as the economy of the South-east Asian country struggles to boost its competitiveness and fend off a possible recession.

Timely move: The measures were also designed to reduce rising energy costs faced by Malaysian households

Energy, Water and Communications Minister Shaziman Abu Mansoor said yesterday the measures were also designed to reduce rising energy costs faced by Malaysian households.

'Taking into account the present world economic slump that is impacting the people generally, the ministry has taken proactive measures by suggesting to the government that the electricity tariff adjustments that were scheduled for July 1, 2009, be carried forward to March 1, 2009,' Mr Shaziman said.

The price of electricity for households is to fall by 2.54 per cent on average while industrial users will get a 5 per cent reduction, the ministry said.

'Especially for small companies, orders are coming down sharply and (they) need to continue to maintain their workforce. There is a lot of cost to bear and now with this electricity tariff coming off they will give a sigh of relief,' said CIMB economist Lee Heng Guie.

The natural gas price for electricity generators will also be cut by 25.2 per cent to 10.70 ringgit (S$4.50) per million British thermal units (mmBtu) from RM14.31 previously.

'To increase foreign investors' confidence, my ministry has agreed that additional gas supplies be given to the industrial sector from the electricity sector to help boost the country's economy,' Mr Shaziman told reporters in the Malaysian administrative capital. He said the electricity tariffs would be reviewed again on July 1, 2009. -- Reuters