KUALA LUMPUR: The Federation of Malaysian Manufacturers (FMM) is disappointed with the minimal reduction in imbalance cost pass through (ICPT) surcharge for the second half of 2024 from 17 sen per kiloWatt hour (kWh) to 16 sen/kWh.
FMM president Tan Sri Soh Thian Lai said this is given that a reduction in surcharge was also expected during the previous review period amid the moderating coal price in the past one year.
"The industry hopes for more transparency in the calculation of the surcharge and at arriving at the one sen/kWh surcharge reduction that has been announced for the non-domestic users.
"Additionally, FMM would like to reinforce its proposal for the government to review the eligibility of small and medium enterprises (SMEs) under medium voltage (MV) category to enable them to qualify for a lower surcharge similar to the rate given to the water services sectors, which currently is reduced to 2.7 sen/kWh from 3.7 sen/kWh previously," he said in a statement.
Soh explained that the industries in general including small and medium, industries (SMIs) continue to operate under a challenging environment as uncertainties around economic growth and inflation outlook in 2024 remains a concern following the impact of subsidy rationalisation and prolonged geopolitical conflicts.
He added that micro, small and medium enterprises (MSMEs) account for 98 per cent of total business establishments in Malaysia, employing 7.3 million of workforce.
Additionally, Malaysian MSMEs also contribute to 37.4 per cent of the country's gross domestic product (GDP) and hence, the continued high surcharge environment would not be tenable for SMEs to remain competitive in the long run.
"Moving forward, as the government is currently undertaking review of the incentive based regulation (IBR) for Regulatory Period (RP) 4: 2025-2027, FMM hopes that the base tariff review, while addressing the revenue-cost structure mismatch in preparation for the energy transition and third-party access arrangement, must ensure that the industrial tariff rate remains competitive and attractive in the region," he said.