KUALA LUMPUR: Business groups have urged the government to intervene and bear the temporary rise in fuel prices rather than impose an electricity tariff hike.
11 business associations and trade groups, in a joint statement today, pointed out that the recent electricity tariff hike would only "set the train of inflation further" and ring a death knell for many businesses and enterprises.
Businesses, they said, would not be able to absorb the "humongous" hike even if the economy was thriving.
"The sudden and immediate implementation of the hike in electricity charges is shocking in so many ways.
"Firstly, it was announced without any discussions with stakeholders and consumers.
"Secondly, it was implemented immediately on Feb 1 and the hike that was effectively more than 15 per cent (or up to 25 per cent hike on off-peak tariff) is shockingly high.
"Thirdly, the government has warned businesses not to pass on the cost of the hike to consumers.
"At this critical juncture where all businesses, big and small, are still struggling in the survival and revival mode, this hike could be the death knell of many enterprises.
"Similarly, consumers are all in very weakened financial states and trying desperately to recover and repair their livelihoods," they said.
The business groups said the electricity tariff hike, which in turn, will increase the cost of essential goods and services, would further restrict and reduce the purchasing ability of consumers.
This, they said, would result in dampened turnovers and this snow-balling effect could further depress economic recovery.
The business groups were confident that market forces will eventually end the energy woes once the supply chain is restored.
"We understand that fuel costs have escalated due to mainly supply chain interruptions coupled with geopolitical trade play.
"This energy situation is further aggravated due to the winter season and the current severe winter climate.
"Once the supply chain is restored and normalcy returns, market forces will cause the predatory pricing to recede and competition will prevail.
"In this predictable short term disruption, it is more prudent for the government to intervene and support the temporary pain and not pass the burden on to the consumer," they said.
They also raised concerns that the electricity tariff hike would lead to a new pricing regime for goods and services that will persist even after supply chain disruptions have ended.
Therefore, they called on the government to hold the decision of increasing the Imbalance Cost Pass-Through (ICPT) surcharge and make a re-assessment once the energy situation becomes clearer.
The 11 business groups that made the joint appeal were the Building Management Association of Malaysia, Bumiputra Retailers Organisation, Industries Unite, Malaysia REIT Managers Association, Malaysia Retail Chain Association, Malaysia Retailers Association, Malaysia Association of Film Exhibitors, Malaysia Association of Theme Park and Family Attractions, Restaurant and Bistro Owners' Association, Malaysia Shopping Malls Association, and the Real Estate and Housing Developers Association (Rehda).