The Malaysian government has announced an increase in the electricity subsidy threshold for domestic consumers from 600 kilowatt-hours (kWh) to 800 kWh per month, effective until December 31. Prime Minister Datuk Seri Anwar Ibrahim stated this move is aimed at alleviating the rising cost-of-living pressures faced by households, particularly in light of recent haze and hotter weather conditions that have driven up electricity consumption.

Under the new measure, domestic users consuming up to 800 kWh monthly will be exempt from the Automatic Fuel Cost Adjustment (AFA), retail charges, and the Sales and Service Tax (SST). The AFA, introduced in July 2025, adjusts electricity generation charges monthly based on fluctuations in fuel prices, power purchase costs, and other generation-related expenses. The current AFA rate stands at 3.67 sen per kWh. TNB, the national electricity utility, emphasized that AFA is a two-way mechanism designed to reflect changes in costs, potentially resulting in either surcharges or rebates. They noted that when global fuel costs decline, consumers benefit through reduced electricity bills.

The government's decision follows growing concerns from consumers about significant spikes in electricity bills despite stable or only modestly increased usage. Several households have reported unexpected jumps in their monthly charges. For instance, Diana Nabilah Radzali, an executive manager, saw her bill rise from her usual RM600-RM800 range to over RM1,100 in recent months, despite consistent consumption levels. Similarly, engineer M. Kumar experienced a 43% increase in his bill—nearly RM300 more—after an 18% rise in consumption. Another consumer, Mohd Aiman Hanbali, reported his electricity bill increasing sharply to RM1,407 from previous amounts between RM200 and RM400, attributing the rise to no additional appliance usage.

In response to these consumer concerns, Prime Minister Anwar convened a special meeting involving representatives from the Finance Ministry, Energy Transition and Water Transformation Ministry, Energy Commission, and Tenaga Nasional Bhd to evaluate measures to mitigate the impact of increased electricity costs.

Consumer groups have largely welcomed the government's move to raise the subsidy threshold. The Federation of Malaysian Consumers Associations (Fomca) described the decision as timely and reasonable, particularly given the environmental factors affecting electricity use. Fomca’s CEO, T. Saravanan, advocated for flexibility in setting consumption thresholds to fairly address changing conditions such as prolonged hot weather, haze, or drought that may lead to higher household electricity demand. At the same time, Saravanan urged consumers to continue adopting energy-efficient practices to avoid unnecessary usage.

The government affirmed that it will continue monitoring fuel costs and energy market developments closely to ensure electricity tariffs balance affordability, supply security, and sustainability in the energy sector. The revised subsidy is intended as an immediate relief to ease households' burden while ongoing assessments of tariff structures continue.