There will be no electricity tariff hikes until at least June 2015, the government announced.

This is after both the government and Petronas agreed to pay RM1.6 billion in energy production cost, to stop Tenaga Nasional Bhd from passing it on to consumers.

Energy, Green Technology and Water Minister Maximus Ongkili said that the government will absorb around RM 840 million.

He said this is the amount the government saved after re-negotiating deals with first generation Independent Power Providers (IPPs).

Petronas will absorb another RM830 million by not raising prices for gas pipes supplied to the IPPs.

The tariff hike was due in July 2014, and the government's decision has saved consumers from paying an additional 3.11 cents per kilowatt, he said.

Ongkili said that the government made the decision to prevent the people from further feeling the impacts of the subsidy rationalisation programme of the government.

“So all the businesses too can prepare themselves knowing that there will be no tariff hikes for the next 12 months solid,” he said.

However, he said that the consumers and industries must be prepared for changes in the tarriff beyond June 2015 as the remaining savings made from the IPP renegotiations would not be enough to absorb another round of Imbalance Cost Pass Through (ICPT).

ICPT happens every six months and entails a review on energy prices and tariff hikes.

“So I appeal to all Malaysians to continue conserving energy. Please switch off electricity when you are not using it. Use it wisely and avoid wastage,” he said.