MISIF opposes electricity tariff increase, says hike "too drastic" for steel industry

KUALA LUMPUR: The Malaysian Iron and Steel Industry Federation (MISIF) has objected the recent electricity tariff increase and said the hike should not be more than 7% as per the last electricity tariff revision in 2011.
In a statement on Thursday, MISIF said it would mean an average 6% increase in the industry’s production cost and an additional cost of more than RM200mil annually, as the industry consumes 800 kwh per metric tonne of electricity alone from steel making to rolling activities.
“We can ill-afford any increase in electricity tariff at this juncture as besides the adverse effect on our competitiveness, it would also derail all efforts in penetrating our export markets that have been painstakingly built over the years.
"This would eventually result in a serious trade imbalance and deficit in USD account for the country,” it said.
Should the Government gradually increased the tariff, MISIF said it would then enable the increased costs to be gradually absorbed into the steel pricing, as steel is a vital component to several critical industries such as construction, oil & gas, electrical & electronic and automotive.
“Moreover, the industry needs a time frame of 12 months before the implementation of any increases,” it said.
MISIF noted the industry would have difficulties in passing the full exorbitant increase in costs to end-users as the latter might opt to import to maintain their competitiveness.
“We are facing fierce competition from imported steel products from all over the world and there has been severe influx of imported iron and steel materials into the country,” it said.