FMM PRESS STATEMENT: FMM Objects to the 14.5 percent Increase in the Base Tariff in July 2025

Head Office, KL

Kuala Lumpur, December 28, 2024 – FMM strongly disagrees to the hike in the base electricity tariff as the impact to industries is big with this 14.5% increase, especially when the manufacturing sector is currently facing its toughest time with escalating costs and uncertainties. Not only will there be impending increase in operational costs expected in 2025 such as the higher minimum wage and other compliance costs imposed by evolving regulatory requirements, the sector is also bracing for global uncertainties such as geopolitical tensions, persistent supply chain vulnerabilities and shifting trade policies including potential new or higher tariffs enforced by the U.S. administration.

It is imperative to note that in the last few years industrial sector has seen several significant operational cost increases, among others:

Natural gas price increase to above RM40/mmBtu since the third quarter of 2022
Increase in water tariff for non-domestic sector from August 2022 to January 2023 with tariff review every 3 years, including electricity charge which is reviewed annually.
Double digit ICPT surcharges for medium and high voltage users since January 2023
The continued impact of the amendment to the employment act which came into effect from 1 January 2023 which saw the expansion of scope including overtime entitlement for those earning up to RM4,000, increase in maternity leave to 98 days, reduction in weekly working hours to 45 hours from 48 hours previously, etc.
In 2024, the cost increases included the following:

In 2025, the following cost increase is expected:

With the overall significant cost increases highlighted above, FMM reiterates its call for the Government to keep the industrial tariff rates unchanged so that Malaysia continues to be competitive as well as attractive to foreign investors. The Government also needs to hold an immediate dialogue with stakeholders on this matter.

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Tan Sri Dato’ Soh Thian Lai

President, Federation of Malaysian Manufacturers

FMM Advocates Transparency, Integrity, Accountability and No Corruption

About FMM

The Federation of Malaysian Manufacturers (FMM) has been the voice of the Malaysian manufacturing sector since 1968. Representing over 12,300 member companies (3,900 direct and 8,400 indirect) from the manufacturing supply chain, FMM is actively engaged with government and its key agencies at Federal, State and local levels. FMM is also well-linked with international organisations, Malaysian businesses and civil society. Apart from benefitting from FMM’s advocacy, FMM members enjoy value-add services, including training, business networking and trade opportunities as well as regular information updates.

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