Govt Studying Phased Rollout of Automatic Fuel Adjustment Mechanism From 2027

KUALA LUMPUR:  The government is studying a proposal to introduce the Automatic Fuel Adjustment (AFA) mechanism in phases from 2027 to ensure electricity bill protection is fairer and better targeted according to consumer categories.

Deputy Prime Minister Datuk Seri Fadillah Yusof said the study was being conducted by the Ministry of Energy Transition and Water Transformation in collaboration with the Energy Commission (ST).

He said the initiative aimed to provide appropriate protection to different categories of consumers amid prolonged uncertainty in global fuel prices.

“The main objective of this study is to provide protection to consumers according to their respective categories, which is considered fairer and more targeted in addressing the prolonged uncertainty in global market fuel prices,” he said.

Fadillah, who is also the Energy Transition and Water Transformation Minister, was speaking while winding up the debate on the Supply Bill 2027 (Budget 2027) at the policy stage for his ministry in the Dewan Rakyat on Tuesday.

He said rising electricity bills faced by some domestic consumers in Peninsular Malaysia had been influenced by several factors, including a surge in global fuel prices following the geopolitical crisis in West Asia and security disruptions in the Strait of Hormuz.

The proposed phased implementation of the AFA mechanism is being studied as part of efforts to ensure that electricity bill protection measures remain fair and targeted, taking into account the different needs of consumer groups.

Further details on the proposed implementation are expected following the completion of the study.