TNB AFA rate August 2026 set at +3.80 sen/kWh
The Energy Commission’s (ST) Automatic Fuel Adjustment (AFA) rate for August 2026 has been set at +3.80 sen per kWh, which is up slightly from +3.59 sen/kWh in July 2026.
Fuel cost pressure eased this month. The pre-subsidy AFA for August is 4.28 sen/kWh (RM452 million), down from 5.55 sen/kWh (RM583 million) in July. The effective rate consumers pay ticked up because the Kumpulan Wang Industri Elektrik (KWIE) fund cushioned less of the cost this time.
In August, KWIE covered 11% of the increased cost (RM51 million, equivalent to 0.48 sen/kWh), compared to the 35% (RM206 million, or 1.96 sen/kWh) it absorbed in July.
This is the fourth consecutive month that AFA has been positive, and the fourth month that KWIE has subsidised the AFA surcharge – though the size of the cushion has swung around considerably, from RM91 million in May to RM87 million in June, RM206 million in July, and now RM51 million.
When the July rate was published, TNB’s three-month outlook had pencilled in +8.33 sen/kWh for August – more than double the +3.80 sen/kWh that has actually been set.
Even before the KWIE subsidy is counted, the pre-mitigation rate of +4.28 sen/kWh came in at barely half that projection. As TNB itself notes, the outlook is an estimate to help customers plan, and the eventual figure is frequently lower once actual fuel costs, the true-up and the KWIE subsidy are reconciled.
Looking ahead, TNB’s latest three-month projection (updated as of July 31, 2026) has also been revised down from the previous outlook: +5.00 sen/kWh for September 2026, +6.81 sen/kWh for October, and +7.50 sen/kWh for November.
The trend is still upward, but noticeably softer than the +8 sen/kWh-plus figures floated a month ago. Do bear in mind that the actual AFA paid may again come in lower than these projections if KWIE support continues.
The fuel price picture
According to Single Buyer’s website, fuel prices in August 2026 remain higher than the baseline prices used in tariff setting – which is why a surcharge still applies – but the excess over baseline is smaller than July’s.
The big mover was Tier 2 gas, which fell sharply to 60.42 RM/mmBTU from 75.58 RM/mmBTU in July (Base price: 46 RM/mmBTU). Tier 1 gas actually rose to 31.71 RM/mmBTU from 27.00 in July, though it remains below its 35 RM/mmBTU base, and coal also climbed, to 131.71 USD/MT from 122.37 USD/MT (Base price: 97 USD/MT). With the ringgit weakening slightly to 4.0557 RM/USD for August – from 3.9455 in July, though still firmer than the 4.307 base rate – that coal price works out to 24.48 RM/mmBTU in ringgit terms (Base price: 19.14 RM/mmBTU).
The steep Tier 2 gas decline, together with a much milder true-up this month (more on that below), outweighed pricier coal to pull the pre-subsidy adjustment down from July’s RM583 million to RM452 million.
The May 2026 true-up
Part of each month’s AFA is a ‘true-up’ that reconciles actual generation costs from a few months earlier against what was forecast. For August, that reconciliation covers May 2026 – and unlike the hefty April true-up that helped inflate July’s rate (a 16% cost overrun amid record peak demand), May’s was mild.
Single Buyer reports that generators operated efficiently in May, with alternate fuel (distillate) needed for just one day during the month. Actual generation costs came in only 1% above forecast, driven by a combination of lower-than-expected electricity sales and higher output from coal, gas, hydro and solar. That modest overrun contributed only a small upward adjustment to the August AFA.
What is Automatic Fuel Adjustment (AFA)?
AFA is a component of your electricity bill. To recap, AFA replaces the previous Imbalance Cost Pass-Through (ICPT) and is automatically calculated as either a surcharge or discount of up to 3 sen/kWh depending on fuel prices – this is revised monthly, with any larger changes (beyond 3 sen) requiring cabinet approval.
That 3 sen threshold is very much in play right now. The computed AFA has exceeded the automatic band for three months running – 3.44 sen in June, 5.55 sen in July and now 4.28 sen in August – and when that happens, the Energy Commission refers the matter to the government, which decides how much of the cost is passed through to consumers. The split between what KWIE absorbs and what lands on your bill as the effective rate reflects that decision.
Introduced as part of the Electricity Tariff Restructuring that took effect from July 1, 2025, the AFA is one of five components or ‘charges’ used to calculate your electricity bill:
- Generation charge: 27.03 sen/kWh for total consumption of 1,500 kWh and below per month or 37.03 sen/kWh for total consumption more than 1,500 kWh per month. This covers the actual cost of generating electricity from power plants.
- Capacity charge: 4.55 sen/kWh. This covers the cost of maintaining sufficient electricity supply capacity.
- Network charge: 12.85 sen/kWh. This covers the cost of operating and maintaining the grid and the local network to deliver electricity.
- Retail charge: RM10/month; waived for total consumption of 600 kWh and below a month. This is a fixed cost for metering, billing and customer service.
- AFA rate: +3.80 sen/kWh for the month of August 2026; waived for total consumption of 600 kWh and below a month.
You can use our TNB Bill Calculator tool to get a rough estimate on how much your electricity bill will be for the month. Essentially, if you use over 1,500 kWh a month, you add the generation, capacity and network charges (totalling 54.43 sen/kWh) to retail charge (RM10) and the AFA rate (+3.80 sen/kWh for August 2026; positive number, so it’s a surcharge).
Alternatively, if your usage is below 1,500 kWh a month, it’s 44.43 sen/kWh plus the retail charge and AFA rate. For total consumption of 600 kWh and below a month, it would only be 44.43 sen/kWh – retail and AFA charges are waived.
Here’s a list of the monthly AFA rates so far:
- July 2025: 0.00 sen/kWh
- August 2025: -1.45 sen/kWh
- September 2025: -1.10 sen/kWh
- October 2025: -6.50 sen/kWh
- November 2025: -8.91 sen/kWh
- December 2025: -6.42 sen/kWh
- January 2026: -4.99 sen/kWh
- February 2026: -2.77 sen/kWh
- March 2026: -2.15 sen/kWh
- April 2026: -0.47 sen/kWh
- May 2026: +1.38 sen/kWh
- June 2026: +2.59 sen/kWh
- July 2026: +3.59 sen/kWh
- August 2026: +3.80 sen/kWh
Domestic consumers who use less than 1,000 kWh a month can enjoy a discount called ‘ Insentif Cekap Tenaga‘ or ‘Energy Efficiency Incentive’. The discount provided is relative to consumption (higher usage, lower incentive), with the maximum discount being 25 sen/kWh.
Domestic users who have smart meters also have the option to enter the Time of Use (ToU) scheme, allowing them to change their electricity usage patterns and take advantage of lower tariff rates during off-peak hours to enjoy savings on their monthly bill.
The scheme has two time zones, with off-peak timings being from 10pm to 2pm from Monday to Friday and throughout the day (24 hours) for weekends. Peak hours are from 2pm to 10pm on weekdays. Here are the energy charges under this scheme:
For usage of 1,500 kWh and below per month
- Peak tariff: 28.52 sen per kWh
- Off-peak tariff: 24.43 sen per kWh
For usage above 1,500 kWh per month
- Peak tariff: 38.52 sen per kWh
- Off-peak tariff: 34.43 sen per kWh
Is there a way to escape from paying AFA?
Yes actually, there are two ways.
Firstly, you can use less electricity. AFA is waived for total consumption of 600 kWh and below a month.
Secondly, there is something called Green Energy Tariff (GET) which you can opt for. This exempts you from AFA – and, since August 1, 2025, from the 1.6% renewable energy fund (KWTBB) levy too – on the green units you subscribe.
However, GET itself costs 5 sen/kWh if you lock in for a 1 year subscription, 4 sen/kWh for 2 years, and 3 sen/kWh for 3 years, thus it only makes economic sense to subscribe to it if AFA is more than what GET costs across the entire period that you subscribe it for.
