About 40 percent of consumers in the country will be unaffected by a proposed increase in electricity tariff if the government approved a Tenaga Nasional Bhd (TNB) proposal to retain the tariff for those who consume RM30 or less of electricity a month.

TNB chief executive officer Che Khalib Mohamad Noh told Bernama today the proposal was agreed to in principle at a meeting between TNB, the Energy, Water and Communications Ministry and relevant agencies.

He was asked to comment on the latest development after the cabinet had asked TNB to review its proposal for a 10 percent increase in electricity tariff and to give special consideration to the low-income group and the industrial sector.

Che Khalib said he did not know when the government would decide on the matter.

Energy, Water and Communications Minister Dr Lim Keng Yaik yesterday said the people should be prepared to spend more on their electricity bills.

Financial problems

Che Khalib said it was important for the review to be approved because TNB was facing financial problems and had to borrow funds from abroad to repay loans and for capital expenditure.

"People have forgotten that the last tariff increase was in 1997, and that since then there have been increase in costs of all kinds - fuel, TNB equipment and labour.

"We have been like a sponge, absorbing the costs but we have reached a level where we cannot go on anymore," he said.

He said TNB had also proposed to the government to allow for small increases in the tariff every two or three years as was practised in South Korea.

On the directive of Deputy Prime Minister Najib Abdul Razak for TNB to hold a meeting with Independent Power Producers (IPP), Che Khalib said the company would meet the ministry officials on the matter.

He said that the price of coal, which is used in the production of energy besides gas, had risen by 80 percent.