KUALA LUMPUR, Jan 30 — The Small and Medium Enterprises Association of Malaysia (Samenta) today questioned the government why Tenaga Nasional Berhad (TNB) is increasing the price of electricity this year when it reported profits last year.
The group said a hike up of 18.4 per cent in utilities bill for a business that’s running at sub-10 per cent margin could mean a reduction of profits up to 40 per cent which could make or break a business.
“While we can understand the need for periodic adjustments in prices, we cannot accept the quantum or the timing of it, especially since TNB reported a 9.6 per cent and 4.6 per cent jump in revenue and earnings respectively for the nine months ending September 30, 2021.
“TNB’s CEO, Datuk Baharin Din was quoted as saying that ‘… demand is expected to improve in the coming months and into next year (2022) as more economic activities open for business.”
“As such by TNB’s own admission, the national utility company will be doing better in coming months, and there are no reasons for the steep hike, especially since it is aspiring to cut down its reliance on coal in its portfolio from 45 per cent in 2021 to 10 percent by 2035,” Samenta group chairman Datuk William Ng said.
Energy and Natural Resources Datuk Seri Takiyuddin Hassan previously disclosed that power tariffs could be increased starting February 1 but did not disclose the expected quantum.
He only asserted that the increase would not be “burdensome” to consumers.
Following that, the government announced it would not increase electricity tariffs for domestic users next month despite previously indicating it would do so.
He also reminded the commercial sector not to increase the prices to the consumers.
Samenta however argued that this was impossible and urged prime minister Datuk Seri Ismail Sabri Yacob to intervene or for Cabinet to lower the rate of increment.
“While we have urged and will continue to urge our members to refrain from raising prices despite this steep hike in electricity bill and costs of raw materials, we must also understand that most SMEs are already operating on a razor thin margin and are struggling to find their footing amidst the pandemic.
“If the proposed hike continues as planned, it will be difficult, if not impossible, for businesses to absorb the increased costs without passing them partially to the consumers, just as TNB is doing,” the association said.
