Malaysians can expect an increase in electricity tariff of between six to seven sen per kilowatt next year, according to Minister of Energy, Green Technology and Water, Maximus Ongkili.

Nonetheless, Ongkili said the government would definitely ensure that the tariff hike would not affect the low-income group.

"The government is still studying the rate. It will be like between 10 percent to 20 percent," said the minister, adding that anything below 20 percent is reasonable.

"The rate will be reasonable. It is a minimal revision for Tenaga Nasional Bhd so as to make sure it reflects the cost of capital, management and salaries," he told reporters in Kuala Lumpur today.

Ongkili hinted that the government would maintain the current structure where consumers using 300 kWh per month and below would not experience a tariff increase.

Hence, no tariff increase should be expected for 75 percent of household consumers (4.4 million consumers) and for those falling in the lifeline band (3.3 million consumers) and 201-300 kWh band (1.1 million consumers).

Ongkili said the rate would also depend on how much the government wants to reduce the subsidy and divert it to socio-economic development.

The minister highlighted that the government has all this while been signalling that there will be a reduction in subsidy and it will be done gradually.

Ongkili said the government has to fork out some RM130 million in subsidy yearly for the tariff while the rest is borne by Petronas, at roughly around RM8 billion to RM10 billion a year, for the power sector.

Ongkili said compared to its Asean peers, Malaysia's tariff is lower than in Thailand and the Philippines but slightly higher than in Indonesia, which subsidises its power sector the most.

"We (cabinet ministers) will have a meeting this week. We will see from there," he said.

The last electricity tariff hike took effect in June 2011 when the subsidised gas price was raised to RM13.70 per million metric British thermal unit (mmbtu) from RM10.70 per mmbtu previously.

- Bernama