More on the targeted subsidy policy that the government is planning to introduce next year, this time from the electricity perspective. According to natural resources, environment and climate change minister Nik Nazmi Nik Ahmad, this will be announced at the end of the year after the Pangkalan Data Utama (PADU) socio-economic database is established, at which point T20 users will be precluded from a subsidy.
He said that at present, the subsidy being provided for electricity is based on consumption, not on users’ income, and that domestic consumers in the T20 income group were enjoying more subsidies compared to those in the B40 and M40 groups.
“Assuming that a T20 household has five or more air-conditioners, a dryer and several other equipment, the electricity bill will be between RM500 and RM700 or more. It is unfair for them to receive a much higher subsidy and gain more in terms of ringgit compared to the M40 and B40 groups, because it (subsidy) is based on consumption,“ he said during the ministers’ question time at the Dewan Rakyat yesterday.
He was replying to a supplementary question from Khoo Poay Tiong (PH-Kota Melaka), who wanted clarification on the removal of the electricity subsidy for the T20 group. Earlier this month, prime minister Datuk Seri Anwar Ibrahim said households with “excessive” power consumption will no longer enjoy subsidy for electricity when the switch is made to a targeted policy.
Khoo also asked whether the government will encourage the T20 group to use solar power as an alternative source of electricity. Nik Nazmi replied that the T20 group should be encouraged to use solar power, but the price of the renewable energy must be reasonable and competitive with conventional electricity sources.
Nik Nazmi said that from January to June this year, the government had forked out RM10.76 billion to subsidise electricity for 9.5 million users, who would otherwise have had to pay for a RM0.27 sen per kWh tariff increase in electricity rates had there been no subsidies.
From an automotive perspective, the new policy could potentially impact households using electric vehicles (EVs). As we reported earlier, should your household happen to be categorised as not qualifying for an electricity subsidy anymore, you could see your per kWh cost rise by a bit. Under the current going rates, this would mean a jump from RM0.571 per kWh to RM0.841 per kWh, without a subsidy in place. The question is, would you find it acceptable to pay more to charge your EV at home?