Power tariff hike will hurt small business owners | Malaysia | The Malay Mail Online

December 4, 2013 5:31 AM

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Lim Guan Eng voiced concern for small- and medium-entreprises that have to struggled to remain cost-competitive. — Picture by K.E. OoiGEORGE TOWN, Dec 4 — Despite an assurance from central bank governor, DAP’s Lim Guan Eng forecasts the looming nationwide hike in electricity tariffs will cut a hole in the pockets of small business owners struggling to keep their shops open, leading to consumers picking up the tab.

The DAP secretary-general today voiced concern for small- and medium-entreprises that have to struggled to remain cost-competitive an increasingly challenging economic environment, noting they will be forced to foot higher electricity bills from January 1 when the increase is enforced across the board.

“The sundry shops, coffee shops, barbers and all kinds of small business owners will have to fork out more to keep their shops open,” the lawmaker said in a statement.

Lim, who is also Penang chief minister, noted the average tariff for both commercial and industrial consumers will increase by 16.85 per cent.

“More worryingly, the small businesses in the commercial or industrial categories who consume no more than 200 kWh monthly will have to suffer a 10 per cent hike in their electricity bill which is grossly unfair and unjustifiable,” he said, in response to recent announcement by the Energy, Green Technology and Water Ministry on the electricity hike for all consumers that include domestic, commercial and industries.

Bank Negara Governor Tan Sri Zeti Akhtar Aziz had yesterday said that businesses can absorb the the power tariff increase through growing demand and exploring cost-saving measures.

But Lim insists the tariff hike will still lead to increase in prices of goods and services.

“The cost of doing business will subsequently increase and it is only to be expected that the prices of goods and services will go up across the board,” he said.

Zeti had justified her remarks by stating that demand is growing at a modest rate so it will not induce price increase and that “they don’t have to pass on everything to the consumers”.

The central bank’s assessment had showed that the tariff hike will only increase inflation by 0.4 percentage points and that the adjustment is going to have a temporary affect on inflation.

Lim, however, believed otherwise as he is certain that everyone will feel the pinch.

“Whether it is a packet of noodles, a simple meal or just a haircut, prices will shoot up,” he said.

When announcing the tariff hike, Putrajaya had revealed that 4.5 million domestic consumers will not be directly impacted by the hike.

The ministry had provided tables detailing that 70 per cent of the 6.45 million domestic consumers in Peninsula Malaysia, who use less than 300 kWh electricity, will not be affected by the hike but this also means close to two million consumers will be hit with an average of 14.8 per cent hike, Lim said.

“In fact, among this two million consumers, 1.4 million of them pay no more than RM200 in their monthly bill before the hike but now a typical urban middle class family or a large family in the rural area will be squeezed by this hike,” he said.

The Bagan MP demanded that the ministry give out details on the implications of this tariff hike on domestic users in Sabah and Labuan similar to the breakdown provided on the domestic consumers in Peninsular Malaysia.

“We want to know how many and to what degree will the Sabahans be impacted by the tariff hike,” he said.

He noted that the ministry also did not provide any breakdown detail for commercial and industrial consumers.

“The ministry must publish more information with breakdown numbers,” he said.

On the renewable energy fund where the one per cent levy had been adjusted up to 1.6 per cent in tandem with the tariff hike, Lim disagreed with the adjustment.

“While we are supportive of genuine efforts to bring more renewable energy into our energy mix, we could not endorse this additional renewable energy fund collection because the Sustainable Energy Development Authority has yet to deliver concrete results on its policies that look promising on the paper,” the Penang lawmaker said.

He claimed that glitches in the Fit-in-Tariff mechanism are not fixed and that many RE permits granted have not been operating.

“Finally, we remain cautious towards the government’s intention to implement the Imbalance Cost Past Through (ICPT) mechanism in the power sector,” he said.

He added that the implementation ICPT is paving way to further increases in electricity and gas price in the near future.

“In the name of subsidy rationalisation, the material wellbeing of common people and small businesses are put to an unacceptable high risk by the Barisan Nasional government,” he said.

Source: themalaymailonline.com

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