Malaysia's Fuel Surcharge Lands on Johor's Data Centres as Hormuz Keeps Gas Dear

Malaysia built part of its data centre boom on the promise of affordable, reliable power. The Gulf crisis is testing the affordable part. Tenaga Nasional's automatic fuel adjustment, the monthly charge that passes changes in fuel costs through to bills, is set at a surcharge of 3.61 sen per kWh for October, the sixth consecutive positive month, according to paultan.org's report of the Energy Commission decision. TNB's three-month outlook points higher: 4.27 sen in November, 4.46 sen in December and 7.59 sen in January 2027, which would be the largest surcharge since the mechanism began in July 2025.

It has not extended it to the large commercial and industrial customers that include Johor's data centres. It is calculated monthly as a surcharge or rebate based on fuel prices and exchange rates, with changes of up to 3 sen per kWh applied automatically and larger moves requiring cabinet approval. Malay Mail explained in July that some plants burn imported oil, diesel or gas under contracts priced in foreign currency, and that geopolitical events such as the US-Iran conflict can tighten fuel supply, push up oil and LNG prices and weaken the ringgit.

On 17 September the government raised the household protection threshold from 600 kWh to 800 kWh a month. TNB says domestic customers using 800 kWh or less from September to 31 December are fully exempt from the AFA, the RM10 retail charge and the 8 per cent service tax. A facility drawing 100 MW continuously for a 30-day month uses 72 million kWh. Wood Mackenzie estimated in June that data centre maximum demand in Johor had reached about 3.8 GW, nearly one and a half times the state's current electricity demand of about 2.6 GW.

Every one of those gas plants will expose consumers, including data centres, to the same fuel price swings now visible in the AFA. Johor's data centre industry grew partly as overflow from Singapore, which has tightly rationed new capacity.