It is well known that Penang State has one of the lowest domestic water tariffs (DWTs), not just in Malaysia but in the world. The first 20 cubic meters in Penang is merely charged at RM0.22, and has not been raised since 1993. Therefore, water tariff restructuring is long overdue and is considered absolutely necessary in Penang. This is because Penang’s domestic water tariffs are too low (due to being heavily subsidised by the Penang State Government [PSG] via the Perbadanan Bekalan Air Pulau Pinang [PBAPP] Sdn Bhd]). Penang’s domestic water tariffs do not even cover the cost of treating and supplying the piped water. This has led to a lot of wastage and water. Not surprisingly, the cheap domestic water tariffs are considered the main reason for Penangites’ high levels of water usage of 307 litres per capita per day (2022). In comparison, Malaysia’s average daily per capita water use was only 201 litres. In terms of DWTs, Penang’s average is RM0.33 compared to Malaysia’s average water tariff at RM0.52 per cubic metre. In comparison, other countries charge much higher rates: Thailand charges more than RM1.00 per cubic metre; the Philippines charges RM2.00 per cubic metre; Singapore charges RM4.00 per cubic metre; Cayman Islands charges RM40.69 per cubic metre; the US Virgin Islands charge RM38.28 per cubic metre; Anguilla charges RM37.30 per cu metre and Bermuda charging RM34.20 per cu metre. In comparison, Penang’s average domestic water tariff is ridiculously low at RM0.32 per cubic metre (the first 20 cubic metres is even lower at RM0.22 per cubic metre). Such low domestic water tariffs do not encourage consumers to save water. Instead, Penangites use the most water in Malaysia, averaging 307 litres per person per day in 2022. Hence, it is timely to revise and restructure domestic water tariffs to truly reflect the basic cost of treating and supplying water. The low tariffs are a result of heavy subsidy from the PSG and PBAPP Sdn Bhd.

Hence, not surprisingly, Penang will finally see a hike in water tariff rates after 31 years following the National Water Services Commission’s (SPAN) tariff adjustment announcement for domestic users in the peninsula and Labuan on 17 January 2024. Penang State, which had previously postponed tariff rate adjustments that were approved by SPAN also announced tariffs adjustments as the PSG felt that it was time to increase the rates. SPAN had announced an increase of an average of 22 sen per cubic meter in water tariff rates for domestic users in the peninsula and Labuan effective 1st February 2024. The main aim of this tariff adjustment was to ensure the sustainability of the water sector and to do away with subsidies moving towards cost recovery. In the case of Penang, the PSG also need funds to replace and improve the old infrastructures, especially valves and pipe mains, which in January 2024 necessitated many days of water disruption in almost the entire state in order to replace and repair the damaged structures.

Besides getting much needed funds for improving and replacing old water infrastructures, there are many other reasons why water tariff adjustments and restructuring is necessary in Penang. These include:

  1. To encourage domestic water consumers to save water.
  2. To encourage business/trade water consumers to install water recycling plants to save water. Businesses will become more environmentally-friendly.
  3. To conserve and protect the environment as water abstraction from rivers will be controlled due to lower water usage.
  4. To control and reduce water usage amongst water consumers. With higher domestic and trade tariffs, at least at cost recovery level, domestic consumers are expected to pay greater attention to saving water.
  5. To removal water tariff subsidies in order to lessen the burden on the PSG.
  6. To reduce the dependency on Water Supply Management (WSM) as higher tariffs will kick-start Water Demand Management (WDM) amongst water consumers.
  7. To reduce the dependency on the Sungai Muda as a major source of water supply for Penang State as higher tariffs will reduce water demands amongst water consumers.
  8. To lead to better water sustainability and help achieve SDG 6.


This study has the following aims:

  • To study Penang Domestic Water Consumers’ (DWC) level of awareness and understanding of the water resources situation in Penang State;
  • To study DWCs’ treated water utilization for their daily consumption after the new domestic water tariffs were enforced by the Penang State Government (PSG) in January 2024; and
  • To study the level of effectiveness of the water tariffs increase on domestic water consumers’ water use pattern; and
  • To study the influence of other factors affecting the behavioural usage of water in order to identify other effective methods to reduce water consumption in households.


The method of conducting is based on both Online and Face-to-Face Interviews of respondents who are domestic water consumers in Penang State, thereby representative of Penang residents. To be representative, all five districts of the state will be represented in the sample. Each district will have 400 respondents, which is more than the 384 respondents required to be statistically representative. The total targeted number of respondents is therefore 2,000. Each respondent represents the head of a household. The responses are to be collected both through the online platform Google Form and hard copy forms via face-to-face interviews. The questionnaire is provided both in English and Malay Languages. Results of the questionnaire will be processed via SPSS.


Immediate Output:

  1. A total of 10 copies of final reports will be produced and shared with partners including PBAPP.
  2. A scientific basis will be established for the PSG, PBAPP Sdn Bhd and other related agencies for making informed decisions related to water resources

Long Term Outcome:

The findings will be transformed into education materials to educate the following groups:

  1. Students (Primary and Secondary)
  2. Tertiary institutes
  3. Local government agencies
  4. Non-Governmental Organisation
  5. Local communities
  6. Local factories


  1. PBAPP
  2. Penang Green Council
  3. School of Humanities, Universiti Sains Malaysia

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