They proposed that the government should instead absorb the surcharge to mitigate the inflationary pressure that had been brought about by higher production costs resulting from the increase in their power bills.

“If the government absorbs the surcharge, it will ameliorate the cost of living and lead to better chances for consumers, businesses and ultimately the economy to revive and recover,” a group of 11 retail associations said in a joint statement today.

A surcharge of 3.7 sen/kWj was imposed on all non-domestic users, such as commercial and industrial companies from Feb 1.

The Energy Commission said electricity costs had increased by 45% because of higher prices of coal, on which the peninsula is highly dependent.

The retailers said the imposition of the surcharge had resulted in electricity bills shooting up by 15-20% for businesses, adding that they were “far too substantial” and have to be passed on to consumers.

“This will translate to higher cost of doing business and lead to even higher prices due to the knock-on effect from raw materials, manufacturing, transportation, cost of holding stocks, and so on,” it said.

They added that this multiplier knock-on effect will lead to far higher consumer prices than the surcharge.

“This new pricing will not adjust downwards when the energy prices retreat and normalise. This will become the new pricing regime which will cause tremendous burden to the businesses and consumers alike who are already financially weakened from the after-effects of the pandemic,” they said.

The Building Management Association of Malaysia (BMAM), Malaysia REIT Chain Association (MRCA), Malaysia Retailers Association (MRA), and Bumiputera Retailers Organisation (BRO) were among the signatories of the statement.

Previously, former prime minister Najib Razak had suggested that the hike in electricity rates for commercial and industrial users should be implemented in stages as the increase could impact goods and services to the public.