Diesel price hike could force small players to close, says hardware group

SEVERAL companies and associations have urged the government to reconsider its decision to cut diesel subsidies.

Speaking to The Vibes, they said the move will cause smaller companies to close, adding that it will adversely affect the industry. 

These remarks from industry players came after Finance Minister II Datuk Seri Amir Hamzah announced a new diesel price of RM3.35 per litre.

The previous price of diesel – RM2.15 per litre – is maintained for Sabah, Sarawak and Labuan.

Persatuan Usahawan Hardware Bumiputera Malaysia president Shukri Ismail said that without the subsidy, it will be difficult for hardware companies to deliver goods to customers.

He said that with the current economic situation, it will be tough for hardware companies to sustain their business as prices are already high.

“At the moment, the operational cost is already high. We will be affected moreover with a bad economy. We will have to increase our prices to accommodate the situation.”

“Our operational cost is high, our delivery cost will have to be increased. From what I see, many smaller hardware companies will have to close because it is too much for them,” said Shukri in a Facebook video.

He urged the government to reconsider the move as it may affect a lot of Bumiputera companies.

“We are disappointed with the decision. We really hope that they will consider this because many will lose income,” he said.

A company supplying concrete in Temerloh, Pahang said they anticipate a rise in the prices of raw material and transportation due to the increase in diesel prices.

The company said that due to this, all prices of its concrete will also be increased, while additional charges will be imposed for deliveries outside a 30km radius.

A hardware supplier in Sg Besi, Kuala Lumpur said it was forced to increase prices as its transportation costs would be “sharply raised” due to the cutting of diesel subsidies.

“Our transporters and suppliers will be increasing trucking charges by 25% from June 10.

“Due to the increased costs of our transport, shipping and products, we will be increasing the pricing of all our products, while transport charges will also be revised,” read a notice from the company.

Responding to complaints, Domestic Trade and Cost of Living Minister Datuk Armizan Mohd Ali said Putrajaya is considering adding more types of road freight vehicles to the list of those eligible for diesel subsidies.

He said parties have written to his office to consider adding more types of cargo vehicles to the list under the subsidised diesel control system (SCDS).

“Other suggestions submitted include increasing the basic quota under SCDS 1.0 for types of public transport vehicles such as school and express buses,” he said in a statement.

He said the applications would be reviewed by the government agencies, including the Finance and Transport Ministries and the Customs Department.

Letter sent to ministry

Meanwhile, 1Malaysia Tow Truck & Car Carrier Association president Md Yusof Yahya disclosed that he has sent a letter to the Domestic Trade and Cost of Living Ministry for feedback.

Yusof hoped for a response from the ministry regarding the matter, saying that the association with 1,000 members will have to increase prices should they receive no answer from the government.

“I have just written a letter and will be submitting it to the ministry. We want to know why tow trucks are not given the subsidy. As we are doing services for the people, we help people and by right we should get government assistance.”

“That is why I wrote to the government because I want to know the answer. We have explained it in the letter about what we do and so on. Hopefully we will get to hear about it.”

“However if we do not, we will have to increase our prices. We cannot be using old prices because this removal changes everything,” he said.

Yusof added that prior to the subsidy removal, each tow truck driver would spend at least RM200 a day for diesel.

“Now we have to fill up RM300 a day. It is RM9,000 a month for diesel alone. With the current economy, how can we do business?” he said.

A tow truck company, in a letter sighted by The Vibes, said due to the increase in diesel prices, all towing charges will also be increased.

“Prices will be increased according to our operating costs. No subsidy was allocated to the tow truck industry,” read the notice. – June 13, 2024.