KUALA LUMPUR: The Malaysian Plastics Manufacturers Association (MPMA) has voiced strong opposition to Tenaga Nasional Berhad’s (TNB) recent announcement of a 14% increase in the base electricity tariff. The new policy presents significant hurdles for the plastics sector, which is already dealing with increasing operational costs and economic uncertainties.

According to BERNAMA News Agency, the MPMA argues that the proposed base tariff hike, which is linked to TNB’s projected capital expenditures (CAPEX), is unnecessary. The association highlights that the expected rise in electricity demand, particularly from data centers and other high-consumption industries, should result in increased revenue for TNB. These additional revenues are anticipated to cover the rising CAPEX without the need to impose further financial burdens on both businesses and households.

The MPMA also questions the rationale behind using expected fluctuations in coal and gas prices to justify the tariff increase. The Imbalance Cost Pass-Through (ICPT) mechanism was specifically designed to handle such cost variances, and the association insists that TNB should utilize this mechanism to manage fluctuations instead of transferring the costs to businesses through higher base tariffs. The plastics industry is concerned that the tariff hike could exacerbate existing economic challenges and affect its competitiveness in the global market.