Penang will implement new water tariff rates for both domestic and non-domestic consumers from July 1, 2026, following a 12-month postponement by the state government [1, 2, 3, 4]. The Federal Government had gazetted the new tariffs on July 30, 2025, but implementation was delayed until mid-2026 [4].
Under the new rates, the average domestic tariff for the first 35 cubic metres (m³) used monthly will be RM0.93 per m³. For the initial 20 m³, the cost increases slightly from RM0.62 to RM0.65, a three sen rise. Consumption between 20 m³ and 35 m³ will be charged RM1.30 per m³, up 13 sen from the previous RM1.17. "The average calculation is made based on the use of the first 35m³ because that is the benchmark commonly used in the tariff structure," said Penang State Transport, Infrastructure and Digital Committee chairman Zairil Khir Johari during a press conference on June 4 [1].
About 82% of domestic consumers who use 35 m³ or less will face a maximum monthly increase of RM2.55 in their water bills [1, 2, 4]. Zairil explained the tariff adjustment aimed to ensure continuity of water supply services and finance vital projects while addressing rising operating costs [4]. He added, "If tariffs are too low, the revenue generated is insufficient to fund infrastructure investments. That is why we need to strengthen PBAPP’s financial resources to ensure that all planned projects can be implemented according to schedule" [3].
For non-domestic consumers, the average tariff rate for the first 500 m³ per month rises to RM2.28 per m³. Non-domestic users consuming up to 500 m³ will see their monthly bills increase by RM77.70, from RM1,064 to RM1,141.70 [1, 2, 4]. This represents about RM2.59 more per day.
However, houses of worship, welfare institutions, the shipping sector, and other selected categories will not face tariff hikes and will keep their existing rates [1, 2].
The tariff increase will support critical infrastructure projects, including the ongoing construction of the Mengkuang Water Treatment Plant and two new plants planned in Sungai Krian with capacities of 80 and 114 million litres per day, respectively [3].
Penang's water consumption reached 865 million litres per day last year and is projected to rise 34.3% to 1,162 million litres per day by 2032 [4]. Domestic water use in Penang stands at 267 litres per capita daily, notably higher than the national average of 225 litres [4]. The cost to treat and distribute water averages RM2.43 per cubic metre, but domestic users currently pay roughly 62 sen for the first consumption block due to subsidies [4].
The adjusted tariffs take effect on July 1, 2026, to fund the development and upgrade of water treatment and distribution infrastructure in Penang [1, 2, 3, 4].
