Malaysia is beginning to feel the delayed impact of global energy disruptions as higher natural gas and coal prices feed into electricity generation costs, Economy Minister Akmal Nasrullah Mohd Nasir warned on 17 September.
Speaking to reporters in Johor Bahru, he said the disruptions that first hit petrol prices in March have now spread to other fuel sources, creating a lag effect that is pushing up electricity tariffs for heavier consumers.
“The disruption to global energy supplies has a lagging effect on other energy sources. In March, the most noticeable impact was on petrol. Now, we can see that the impact has spread to other energy sources, including natural gas and coal,” Malay Mail quoted him as saying, citing Bernama.
Natural gas, a primary fuel for electricity generation, typically takes three to four months to reflect changes in petrol prices. The current bills reflect July and August fuel costs, he explained.
The surcharge falls on consumers using more than 600 kilowatt-hours (kWh) a month. Their rates fluctuate through the Automated Fuel Adjustment (AFA), which tracks global fuel prices and foreign exchange rates. September’s AFA surcharge stands at 3.67 sen per kWh.
Households consuming below 600 kWh remain shielded under the existing tariff structure. “Under the current tariff mechanism, the majority of consumers who use less than 600kWh a month are not directly affected by changes in fuel costs,” The Star reported him saying.
But many households have exceeded the 600 kWh threshold in recent months. Hotter weather and haze have driven up air-conditioning use, pushing more families into the higher-consumption bracket and exposing them to the AFA surcharge for the first time.
Prime Minister Anwar Ibrahim responded on 17 September by expanding the protection threshold to 800 kWh, effective from September through 31 December. The expanded coverage exempts eligible domestic users from the AFA, retail charges, and sales and service tax.
“This step is being taken as an immediate measure to address the pressures currently faced by the people,” Malaysiakini quoted Anwar as saying in a statement.
Akmal Nasrullah said Anwar would chair a special meeting to assess the tariff situation and consider further measures to ease the burden on consumers. He noted that unfavourable weather was compounding the problem: “When the weather is unfavourable, we advise people to remain indoors in safer places, but this may also contribute to higher energy consumption.”
The widening impact of the energy crisis reflects global pressures that began with the Middle East conflict earlier this year. While petrol prices were the first visible casualty, the knock-on effects on natural gas and coal are now flowing through to consumer electricity bills worldwide, not just in Malaysia.
Malaysia’s energy mix relies heavily on natural gas for power generation, making it particularly vulnerable to global gas price swings. The government faces a balancing act between keeping electricity affordable and maintaining the financial sustainability of the energy sector.
