PETALING JAYA: Despite the possibility of higher electricity bills in the near future, high-income households are taking a wait-and-see approach before deciding whether to change their consumption patterns.
This is after Putrajaya announced that it is ending electricity subsidies for large companies and wealthy households once its database on household incomes is completed by the end of the year.
Called Padu, this integrated database will include household income, location, number of vehicles, record of assistance received from government departments and other information to determine whether a household is eligible for a slew of subsidies, Prime Minister Datuk Seri Anwar Ibrahim said in May.
The prospect of higher energy bills has lower and middle-income earners worried as those who have home businesses and large families may also be affected once energy subsidies end.
Putrajaya spent RM5.8bil in subsidies from July 1 to Dec 31, 2022, to bear higher electricity generation costs and keep tariff prices low for consumers.
By ending blanket subsidies, households in the Top 20 (T20) income range and multinational corporations (MNCs) will likely pay more for their electricity each month.
Deputy Finance Minister II Steven Sim had reportedly said that Putrajaya was looking to save RM4.1bil by cutting subsidies to T20 households and MNCs.
Airline pilot Wan Muhammad Wan Azmi said his family has no plans to change their habits yet even though their monthly electricity bill is expected to go up.
The 49-year-old’s family currently spends RM1,200 per month and his house has four air-conditioners.
“Three air-conditioners are on at the same time for many hours when everyone is at home and when they sleep at night.
“The living room air-conditioner is on almost all the time as my wife stays at home,” he said, adding that his children are constantly on their gadgets as well.
For the time being, his family’s monthly income is sufficient to cover their monthly expenses including their hefty electricity bill, Wan Muhammad said.
“At most, we might just be more energy conscious if we want to save on our electricity bill once the subsidies end,” he said.
General manager Lee Ah Kiong, 60, said his family would be forced to change their habits if his electricity bill goes up drastically.
“We currently spend close to RM400 a month on just electricity because everyone at home is using their own computers every day and my two children have their own air-conditioners.
“Considering our total household income of RM10,000 and total expenses of over RM6,000 a month, a sudden electric price hike should be fine as long as it’s not too drastic,” he said.
However, the Federation of Malaysian Consumers Associations (Fomca) warned that middle-income (M40) households could be indirectly affected by the government’s plans.
Its chief executive officer Dr Saravanan Thambirajah said the M40 households could be miscategorised as T20 and see their power bills go up.
“The (M40) is stuck in a weird spot as they can’t depend on financial aid, subsidies or support programmes like the B40 group.
“Nor do they have the financial flexibility or a high level of income to help offset the sudden spike in their monthly bills like the T20 group.
“Currently, most of the M40 spend 15% to 20% of their monthly income on electric bills already, so a sudden jump could severely diminish their purchasing power and hurt the economy as a whole,” he said.
Intan Baiduri low-cost flat resident Khairul Anuwar Yusoff expressed worries that fellow residents could also be wrongly classified as affluent households.
Until details of the Padu database are revealed, these households are worried they will no longer receive the electricity subsidy, he said.
“Some of them run their own small business from home and can have electricity bills of up to RM250 a month due to their frequent usage of cooking equipment like ovens and multiple fridges.”
Khairul also said that T20 households would be the least affected in the long term by the withdrawal of electricity subsidies.
“They will either just install more solar panels to power their homes or replace their electronics with more energy efficient but expensive ones,” he said.