The Malaysian Iron and Steel Federation (Misif) has expressed concern about the sudden and permanent increase in electricity tariffs imposed on the iron and steel industry, which is still in decline after the price collapse in April 2022.
In today's The statement said that the steel industry is facing a sharp decline in demand both domestically and abroad.
He added that medium and high voltage users will face a sharp increase in the surcharge for past imbalance cost (ICPT) from 3 .7 Sep/kWh to 20 Sep/kWh. The net impact of this increase will be over 40% for industrial users over the next six months.
Misif stated that in order to compete with imports and remain internationally competitive, the steel industry is in dire need of competitive energy costs . Depending on the route of steel production, both the steelmaking and rolling processes consume up to 650 kWh of electricity to produce one tonne of steel products.
In order to avoid additional burden on an industry that is already in a very difficult situation, and to ensure that the industry does not have to pass on the high cost of electricity to consumers, which leads to high inflation, Misif is calling on the government to consider maintaining the current ICPT surcharge of 3.7 sen for three months, from January to March 2023; increase in the surcharge by 6.3 Sep/kWh for six months, from April to September 2023; increase by 10 Sep/kWh from October-December 2023; and a moratorium on deductions of 1.6% to the Renewable Energy Fund for the next six months for categories of customers affected by the increase in the surcharge.
Concern arose after the Minister of Natural Resources, Environment and Climate Change announced on 16 December electricity tariff adjustment for Peninsular Malaysia for the period from 1 January to 30 June 2023. the cost of electricity for industry.
Misif estimates that the annual cost of electricity in the steel industry of RM1 billion in 2022 will rise to more than RM1.5 billion.
