KUALA LUMPUR, March 1 (Bernama) -- A revised electricity tariff proposal which will take into consideration the impact of an increase on the lower income group, will be considered in due course, says Minister of Energy, Water and Communications Datuk Seri Dr Lim Keng Yaik.

In a statement here Wednesday, he said that the Cabinet had in its meeting this morning considered Tenaga Nasional Bhd (TNB) proposal for electricity tariff review.

However, he said that the Cabinet requested the Ministry to provide more detailed analysis on the impact of electricity tariff increase on the low income group and energy-intensive industries.

"The government remains committed to ensure that any tariff restructuring will take into account the interest of all parties and will not burden the lower income group," he said.

However, it was imperative for consumers to embrace energy conservation and utilise energy more efficiently as global energy price has increased substantially.

The government anticipated that the trend would not change in the short to medium term.

TNB had first submitted a proposal for tariff revision in December 2004 to increase the average electricity tariff due to several factors.

These include the rise in cost of electricity supply by 23.1 percent from 1997 to 2005 due to increases in fuel cost and the cost of raw materials for equipment.

The price of fuel such as coal and oil had escalated by 69 percent and 244 percent respectively (between 1997 to 2005) while the cost of steel, copper and aluminium for making equipment had increased between 38 percent to 112 percent from 1998-2005.

The statement said that the increased tariff would also provide TNB with the needed capital expenditure (capex) to strengthen electricity supply systems as its capex is expected to increase from RM4.0 billion in 2005 to RM9.0 billion in 2010.

It would also improve TNB's cashflow that has been registering deficits from 1997 to 2005 with significant gap between revenue from sales of electricity and expenditures on operational cost and capital expenditure.