Power tariff hike may spell doom for many enterprises, say business groups

PETALING JAYA: A group of 11 business associations has warned that the sudden and huge electricity tariff hike could be the end of many struggling outfits.

"At this critical juncture where all businesses, big and small, are struggling in survival and revival mode, the hike could be the death knell of many enterprises," they said in a joint statement on Tuesday (Feb 8).

The sudden and immediate implementation of the increase was shocking as it was done without any discussions with stakeholders and consumers, they added.

"Furthermore, it came into effect on Feb 1 with a hike of 15% (or up to 25% on off-peak tariff) with the government warning not to pass on the hike to consumers," they said in the statement.

They added that consumers are similarly in a weakened financial situation and trying desperately to recover.

The expected hike in cost of goods and services resulting from the tariff increase will further cut their purchasing power, resulting in dampened trade volumes and turnover, they said.

"The unprecedented electricity hike together with flow-on inflationary impact of goods and services will (set new pricing levels) which will not retreat even though supply chain disruptions are overcome.

"We appeal to the government not to fuel and set the train of inflation further as currently even without the hike, inflationary pressures are being experienced by all consumers," they added in the statement.

The groups called on the government to reverse the decision until the situation improves.

The groups include the Building Management Association of Malaysia, Malaysia Retail Chain Association, Real Estate and Housing Developers Association and Malaysia Shopping Mall Association.