Introduction to AFA (Automatic Fuel Adjustment)
If you have been looking at your electricity bill lately, you might have noticed a new term: AFA. As of July 1, 2025, Malaysia officially retired the long-standing ICPT (Imbalance Cost Pass-Through) mechanism and replaced it with the Automatic Fuel Adjustment (AFA).
AFA is a monthly mechanism that adjusts electricity tariffs to reflect the actual cost of fuel (coal and natural gas) used in power generation, as well as changes in foreign exchange rates (specifically the MYR/USD).
Main Features & Benefits
- Monthly Updates: Unlike the old system, AFA is reviewed and updated every month by the Energy Commission (ST).
- Transparency: It provides a direct, real-time link between global market conditions and your bill.
- Smoother Fluctuations: Because it adjusts monthly, it avoids the “sticker shock” of massive six-month price hikes.
- Cap Mechanism: Monthly adjustments are generally capped at ±3 sen/kWh to protect consumers, though larger rebates can be approved by the Cabinet.
Comparison of AFA vs. ICPT
The transition from ICPT to AFA was designed to make Malaysia’s energy market more responsive. Here’s a side-by-side comparison:
Feature | ICPT (The Old Way) | AFA (The New Way) |
Review Frequency | Every 6 Months | Every Month |
Adjustment Logic | Based on previous 6 months’ costs | Based on real-time monthly fuel costs |
Transparency | Complex 6-month calculations | Clear, monthly market-linked rate |
User Protection | Subsidy capping for certain blocks | Full exemption for usage ≤600 kWh |
How AFA Affects Your 2026 Bill
In 2026, your TNB bill is “unbundled,” meaning you see exactly what you are paying for. AFA is applied as follows:
- Exemption Zone ( ≤600 kWh): If you use 600 kWh or less per month, you are fully exempt from AFA. You also enjoy a waiver of the RM10.00 Retail Charge.
- AFA Zone (> 600 kWh): Once you cross the 600 kWh threshold, AFA (whether it is a surcharge or a rebate) is applied to every single unit of electricity you consumed that month.
Note for 2026: In early 2026, AFA has largely been a rebate. For example, February 2026 saw a rebate of -2.77 sen/kWh, meaning money was deducted from your bill!
How to Calculate Your AFA Charge
Calculating the AFA component is simple. You just need your total monthly consumption (kWh) and the current month’s AFA rate announced by the Energy Commission.
The Formula
AFA Amount (RM) = Total Consumption (kWh) ✕ AFA Rate (RM/kWh)
Example Scenario (February 2026):
Imagine you are a moderate user with a total consumption of 800 kWh and the AFA rebate is -2.77 sen (or -RM0.0277).
- Check Eligibility: 800 kWh is > 600 kWh, so AFA applies.
- Calculation: 800 ✕ (-0.0277) = -RM22.16
- Result: RM22.16 will be deducted from your total bill.
Stay Ahead of AFA with AQ Energy
AFA is designed to be fair, but it’s the monthly nature that makes your electricity expenses less predictable. If global fuel prices spike, your bill will rise within 30 days.
The best way to “neutralize” AFA in 2026 is through Solar Energy. By generating your own power, you reduce the number of units you buy from TNB, effectively shrinking the base that AFA can be applied to.
- Interested in installing solar panels for your home? Check out our Solar Panel for Home page
- Want to know more about solar solutions for business, commercial or industrial? Check out our Solar Panel for Work page to get started.
- WhatsApp AQ Energy today for a Free Quotation for Solar Installation.
Frequently Asked Questions (FAQs)
A. How does Automatic Fuel Adjustment (AFA) work and what is it for an electricity consumer?
Think of the AFA mechanism as a way to keep our electricity bill transparent and up-to-date. Instead of waiting months for a major price change, it automatically tweaks the tariff every month to match current fuel costs and exchange rates. This approach is much fairer because it gives you a real-time reflection of energy costs through smaller, regular updates, helping you avoid those price shocks. Lastly, it encourages every consumer to stay energy-efficient while making monthly energy expenses feel a lot more stable and predictable.
B. Does AFA apply to Solar ATAP (NEM) users?
Yes. AFA is applied to the Net Energy you import from the grid. If you generate enough solar to keep your imports below 600 kWh, you remain exempt from AFA!
C. Why did my bill go up if the AFA is a rebate?
This usually happens because you crossed a higher tariff bracket (like the 1,500 kWh tier) or because your usage increased during hot weather. While the AFA rebate helps, the Base Energy Charge still makes up the bulk of your bill.
D. Is the AFA different for businesses?
Commercial and Industrial users generally do not get the 600 kWh exemption. AFA applies to all units consumed for non-domestic categories.
D. Is there a cap on how high AFA can go?
Yes, there is a standard cap of ±3 sen/kWh per month. Any fluctuation beyond this requires direct approval from the Cabinet to protect the public from extreme market volatility.
