Starting 1 August 2025, households in Peninsular Malaysia that consume more than 600?kWh of electricity per month will receive a rebate of RM0.0145 per?kWh under a new mechanism known as the Automatic Fuel Adjustment (AFA).
The rebate is part of a government initiative to reflect lower global fuel prices in monthly electricity bills. This marks the first time electricity tariffs will be adjusted on a monthly basis, replacing the previous Imbalance Cost Pass-Through (ICPT) mechanism which was updated every six months.
Monthly tariff adjustments based on fuel prices
The AFA system is designed to provide more accurate and timely adjustments to electricity pricing by linking them directly to real-time global fuel costs.
The rebate for August is based on reductions in global coal and gas prices during July, which serves as the reference month.
Only domestic users who consume more than 600?kWh monthly are eligible for this rebate. Households using 600?kWh or less will continue to be exempted from the surcharge.
The government has emphasized that these changes will not affect the current exemption for low-consumption users.
The Ministry of Energy Transition and Water Transformation, through Deputy Prime Minister Datuk Seri Fadillah Yusof, also announced estimated rebates for the coming months. The projected AFA rates are:
- September 2025: RM0.0123 per?kWh
- October 2025: RM0.0265 per?kWh
- November 2025: RM0.0195 per?kWh
These projections are based on current fuel price trends and may be updated if market conditions shift.
Malaysia’s power mix and fuel cost impact
As of late July 2025, Malaysia’s electricity generation relied on the following fuel sources:
57.9% coal
34.9% natural gas
4.7% hydroelectric
2.5% solar
Coal used in power generation is currently priced at USD97 per metric ton, while regulated natural gas costs between RM24 and RM35 per MMBtu for the first 800 million standard cubic feet per day (mmscfd).
These fuel prices play a significant role in determining the AFA adjustments each month. By switching to a monthly review, consumers and businesses can expect billing that more accurately reflects fuel cost movements.
If your household uses more than 600?kWh of electricity in August, expect a rebate of RM0.0145 per?kWh on your bill. With monthly adjustments now in place, electricity pricing in Malaysia is moving toward greater transparency and responsiveness.
How will this affect your bill or energy usage strategy? Let us know your thoughts. Stay tuned to TechNave.com for more updates.
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