Volatile global fuel prices could adversely affect electricity generation costs, in turn influencing tariffs for consumers. Despite this, the government assured that it will minimise the impact of the electricity cost changes on the public and business sector.
Speaking during the Global Supply Crisis briefing, Economy Minister Akmal Nasrullah Mohd Nasir explained that measures are in place to ensure the majority of domestic consumers are not burdened by rising living costs. He went on to note that roughly 7.5 million domestic consumers consume below 600kWh. This translates to about 85% of households. These users will continue to be exempted from the Automatic Fuel Adjustment (AFA) charge.
Increasing generation costs
According to Akmal, the electricity generation costs for May 2026 are expected to increase to RM21.28 per million Btu compared to the base price of RM19.14 per million Btu. This is, of course, thanks to the rising fuel prices.
At the moment, Malaysia is largely dependent on coal and gas for electricity generation. As of April 2026, coal accounts for 54% of the generation mix, while gas takes up 40%. This dependence means that the system is vulnerable to changes in global energy markets.
Furthermore, the minister noted a lagging effect in electricity supply. The impact of rising global fuel prices will only be felt around two months after the initial crisis.
Meanwhile, the demand for power is increasing. Between 20 and 25 April, the average peak demand increased by 1.9% to 20,640 MW, up from 20,257 MW during the previous week. Apparently, this increase is caused by the hot weather, which resulted in higher use of air-conditioning.
Electricity supply stable for now
With all this in mind, the minister assured that the country’s electricity supply remains stable. However, generation costs must be managed properly given the fluctuations in global fuel prices.
The minister also advised consumers to use electricity wisely and adopt energy-saving practices. These include setting air-conditioning temperatures at reasonable levels, switching off unused appliances, and reducing consumption during peak hours.
(Source: Bernama, Malay Mail)
