Wholesalers, suppliers raise prices after diesel surges 56% under new subsidy scheme

Business owners have reacted to the sharp increase in diesel prices in Peninsular Malaysia with early announcements of price hikes, a move widely expected following the government's decision to remove bulk subsidies, pushing diesel prices to an all-time high of RM3.35 since yesterday.

Several major suppliers of goods and raw materials contacted by MalaysiaNow said that even with the targeted subsidy programme, they could not guarantee that the prices of goods and services could be maintained.

On the first day that the new diesel price came into effect, notices were issued by several companies informing customers of the impending price increases.

One company which supplies ready-mix concrete and cement products expects costs to rise and has therefore decided to increase the cost of delivery by RM12 for every cubic metre of concrete within a 30km radius.

"For distances exceeding 30km, additional charges will apply," said a statement from LCS Marketing Sdn Bhd, which operates from Pahang.

"We will revise our quotation accordingly and we hope that you understand that factors beyond our control have made this increase inevitable."

Meanwhile, a hardware wholesaler in Kuala Lumpur said it had no choice but to increase the price of goods as transport costs had risen by 25%.

Chuan Soon Heng Sdn Bhd cited the government's removal of bulk subsidies for  diesel as the reason for its decision.

"After carefully reviewing the increased costs of our transport, shipping and products, we have to make the difficult decision of increasing the pricing of all products, and the transportation charges also will be revised," it said in a statement released yesterday.

A company spokesman told MalaysiaNow that the notice was issued to give customers advance notice so that they would not be taken by surprise when the new prices came into effect.

The government's decision to remove bulk subsidies for diesel has led to angry reactions from the public. 
Many have taken to social media to question the decision, saying it will lead to a sharp rise in prices.

Many also said that Putrajaya should have implemented the plan to remove fuel subsidies gradually.

The issue of fuel prices has dominated the political debate on the back of decades of promises by Prime Minister Anwar Ibrahim and his Pakatan Harapan coalition to lower fuel prices by returning the nation's petroleum profits to the people.

An auto parts dealer in Johor Bahru said his luck was bad as his shop had opened only five months ago.

Alif Izuan, 34, said he now faced higher logistics costs from suppliers and had to review the prices of goods in his shop.

"We still have stocks of spare parts that we bought earlier this year.

"But the price is higher for the order to be dispatched tomorrow. We have to charge more because the supplier delivers the goods using a diesel lorry," he told MalaysiaNow.

He said traders were not raising prices to make a quick profit.

"If the prices go up, our profit will not increase.

"If costs go up and prices stay the same, we lose. Nobody does business this way."