The government’s decision to increase electricity tariff did not come as a shock as the government had planned for it last year but was only delaying its implementation due to fear about the political backlash it would have on BN in the 13 th general election.
Former Energy, Green Technology and Water Minister Peter Chin had gave an obvious hint when he had on October 3 last year told Sin Chew Jit Poh that an increase in power tariffs in the future was inevitable due to climbing international prices of fuel.
But what was shocking about yesterday’s hike announcement was that the quantum of increase would range from 14.89% to 16.9% starting 2014.
This is a steep increase which will bring burden directly to consumers and industries and will also create a chain effect that result in increased prices of many goods , thus hurting even the lower income group.
Why must the government impose such a steep increase when there was already an imposition of 7.12 % increase in June 2011?
What is most disappointing is the fact that the government does not have the will to do what ought to be done despite past repeated calls by the Opposition – to cut the billion ringgit subsidies to independent power producers.
On May 19, 2011, The Malaysian Insider portal reported that second Finance Minister Datuk Seri Ahmad Husni Mohamad Hanadzlah had said that the controversial gas subsidies for independent power producers were under review but no decision had been made yet.
He was reported to have said the following at the sidelines of the 15th Malaysia Banking Summit when asked if the subsidies would be relooked at.
“We have done a discussion and study under the Ministry of Energy, Green Technology and Water, EPU (Economic Planning Unit) and myself”.
More than 2 years have passed, nothing has been done by the government yet it has announced two electricity hikes effective on June 1, 2011 and Jan 1, 2014.
Why should consumers and industries continue to bear the brunt of BN ’s policy of subsidy rationalization when the IPPs which have reaped huge profits continue to enjoy huge subsidies due to lop sided agreements signed by BN?
The Prime Minister must inform the nation what has happened to the review on the gas subsidies to the independent power producers.