Business owners across Peninsular Malaysia are grappling with a significant rise in diesel prices following the government's recent decision to remove bulk subsidies. This policy change has led to diesel prices reaching an unprecedented RM3.35 per liter, a surge of 56% that has prompted price hikes among wholesalers and suppliers.
Several major suppliers of goods and raw materials have already announced their intention to increase prices. Despite the implementation of a targeted subsidy program, these suppliers are finding it challenging to maintain current price levels for goods and services.
On the very first day the new diesel price was implemented, multiple companies issued notices to their customers about the upcoming price increases. For instance, a supplier of ready-mix concrete and cement products operating from Pahang, has announced a RM12 increase in the cost of delivery per cubic meter of concrete within a 30km radius. For additional distances over 30km, add-on charges will apply.
The company stated in their notice that the quotation will be adjusted accordingly and hope their customers understand that factors beyond their control have made this increase unavoidable.
Similarly, a hardware wholesaler based in Kuala Lumpur, has decided to raise the prices of its goods due to a 25% increase in transport costs. The company attributed this decision directly to the government's removal of bulk subsidies for diesel.
The company stated that after a thorough assessment of rising costs in transport, shipping, and products, the adjustment of prices for all products and transportation charges is necessary.
The public's reaction to the removal of bulk diesel subsidies has been one of anger and frustration, with many taking to social media to express their concerns. Critics argue that the government's abrupt removal of subsidies will result in a sharp rise in prices across various sectors. Some have suggested that a gradual implementation would have been more manageable.
The issue of fuel prices has been a focal point in Malaysian politics, especially given the promises made by Prime Minister Anwar Ibrahim and his Pakatan Harapan coalition to lower fuel prices by redistributing the nation's petroleum profits to the people.
Business owners are facing a tough reality. An auto parts dealer in Johor Bahru who opened his shop just five months ago, expressed his concern about the increased logistics costs from suppliers.
"Although we still have old stocks of spare parts purchased earlier this year, however, for orders to be dispatched tomorrow, the price will be higher. This increase is necessary because the supplier delivers the goods using a diesel truck," he explained.
The dealer stressed that traders are not raising prices to exploit the situation but are compelled to do so to sustain their businesses. He concluded that if costs increase and prices remain the same, he loses as no one does business this way.
The removal of diesel subsidies marks a significant shift in Malaysia's economic landscape, forcing businesses to adapt to higher operational costs and prompting a ripple effect of price increases across the board. As the nation navigates these changes, both businesses and consumers will need to adjust to the new economic realities.
By: Kpost
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