Malaysia PM Confirms 'Slight Increase' in Electricity Tariffs for Industrial Sector

As the Malaysian government prepares to reduce fuel subsidies in 2025, Prime Minister Anwar Ibrahim has confirmed a "slight increase" in electricity tariffs in Peninsular Malaysia, leaving businesses wary that increased costs will deter investors.

- Lu Wei Hoong

This comes after Tenaga Nasional Berhad (TNB), the sole electricity provider in Peninsular Malaysia, announced a 14.2 per cent hike in the base tariff for its "Regulatory Period 4" (2025 to 2027) on Dec 26, 2024.

But the move has those in the business community crying foul, with concerns that these measures, along with the proposed mandatory Employees' Provident Fund (EPF) contributions for foreign workers - which could come into force this year - will lead to higher operational costs, making Malaysia less attractive to investors.

Mr Anwar in October 2024 announced that RON95 petrol subsidies will be removed in mid-2025 and said that education subsidies will be gradually reduced for the top 15 per cent of the wealthiest consumers.

All this comes against a backdrop of global trade volatility triggered by US President Donald Trump's tariff war against several countries, including China. These headwinds have painted a gloomy picture for Malaysia's export-oriented economy.

Datuk Seri Anwar tried to reassure the business community at a Feb 3 event, clarifying that the electricity price increase would not be 14 per cent. He said a "small increase" was necessary to generate additional revenue for the government to fund public utilities.