Malaysian Shopping Malls Push Back Against Proposed 2025 Electricity Tariff Hike
Shopping mall operators in Malaysia are voicing concerns over the proposed 15% electricity tariff hike, which is set to take effect in July 2025. The increase, announced by Tenaga Nasional Bhd (TNB), threatens to exacerbate financial pressures on an already fragile post-pandemic retail sector, potentially triggering inflation and reducing consumer spending power.
Key Concerns Raised by Mall Operators
Electricity Costs Set to Skyrocket
- Base Tariff Increase: Under Regulatory Period 4 (RP4) from 2025 to 2027, the base electricity tariff will rise by 14.2% to 45.62 sen per kilowatt hour (kWh) from 39.95 sen per kWh during RP3 (2022–2024).
- ICPT Tariff Surge: The Imbalance Cost Pass-Through (ICPT) tariff jumped by 800%, from two sen per kWh to 16 sen per kWh, significantly inflating energy costs for commercial properties.
- For a 500,000 sq ft mall, the additional electricity cost is estimated at RM5 million annually.
Compounding Cost Pressures
- Minimum Wage and Water Tariff Increases: Combined with the electricity hike, these factors have contributed to a 140% rise in operating costs for malls.
- Rising Statutory Fees:
- Renewal fees for lifts and escalators under the Department of Occupational Safety and Health have risen by 300% to 500%. Costs now range from RM650 to RM1,900 per lift, up from the previous RM192 to RM392.
Impact on Retail and Consumers
Inflation and Rising Prices
The ripple effect of the tariff hike and higher operating costs will lead mall operators to pass on these expenses to retailers, ultimately driving up consumer prices for goods and services.
Reduced Spending Power
As inflation rises, household disposable income and spending power will take a hit, further challenging the retail sector’s recovery post-pandemic.
Industry Pleas for Intervention
The Malaysian Shopping Malls Association (PPK) has urged TNB and related authorities to:
- Reconsider the tariff hike to prevent undue financial strain on the retail and commercial sectors.
- Implement equitable pricing structures to balance the needs of businesses and consumers.
The association highlighted the compounded burden of increasing utility and statutory costs, warning that these pressures could hinder the growth of Malaysia’s retail and commercial property markets.
Looking Ahead
With additional voices from the Federation of Malaysian Manufacturers, Malaysia Retailers Association, and Malaysian Iron and Steel Industry Federation opposing the hike, discussions are expected to intensify in the lead-up to the July 2025 implementation.
The coming year will likely see significant challenges for mall operators, retailers, and consumers, as rising costs reshape Malaysia’s commercial landscape. The industry is calling for urgent action to prevent a further squeeze on margins and mitigate inflationary pressures.
