Kuala lumpur: The Automatic Fuel Adjustment (AFA) has been introduced as a new mechanism for electricity tariffs in Peninsular Malaysia. The initiative aims to make tariff reviews more transparent and aligned with the global fuel market, as stated by Deputy Prime Minister Datuk Seri Fadillah Yusof, who also serves as the Energy Transition and Water Transformation Minister.
According to BERNAMA News Agency, the AFA will adjust electricity tariffs on a monthly basis, as opposed to the previous six-month schedule under the Imbalance Cost Pass-Through (ICPT) system. This change is set to provide a more accurate and transparent reflection based on real-time fuel costs. Domestic users consuming less than 600 kilowatt-hours (kWh) per month are exempt from the AFA, whereas those consuming more will be charged for energy resources such as gas or coal. For August, users benefitted from a rebate of 1.545 sen per kWh due to a drop in fuel costs during that month.
Fadillah explained that the latest tariff review involves a shift from categorizing customers by economic sectors to assessing them by voltage usage. This new approach encourages high-energy consumers to adopt renewable energy solutions, including solar photovoltaic installations, to save costs and reduce overall energy consumption.
In response to a query from Dr Mohammed Taufiq Johari regarding the objectives of the new electricity tariff schedule, Fadillah highlighted that it represents an improvement over the previous structure, focusing on four main principles. These principles include transparent tariff setting, a tariff structure that reflects actual supply costs, fair and equitable cost distribution among all consumers, and minimal impact on domestic users in terms of bill variance.
The new tariff structure incorporates energy charges, capacity charges, network charges, and retail charges for each user category, compared to the old structure, which only included energy and minimum charge components. This change aims to provide more transparency and expose users to the costs involved in obtaining electricity supply.
On June 20, the Ministry of Energy Transition and Water Transformation, through the Energy Commission, announced a revised electricity tariff schedule for Peninsular Malaysia effective from July 1, 2025.