While the Malaysian government has acknowledged that around 15% of Malaysians are affected by the recent increase in diesel fuel prices following the Middle East conflict, MCA vice president Datuk Lawrence Low has said that the assertion that just 15% of Malaysians are affected does not mirror the broader economic reality, The Star has reported.
The impact of higher diesel prices extends far beyond the immediate diesel user, as diesel is a major cost component across multiple sectors of the economy, according to Low. “Rising diesel costs would eventually be passed through the supply chain and reflected in the prices of goods and services paid by consumers,” he was quoted as saying.
The key issue is not how many people purchase diesel directly, but how the higher costs affect transportation, construction materials and food prices, and that prices increase due to higher diesel cost would make it difficult for any segment of the population to remain unaffected, Low said. “Sectors such as logistics, construction and tourism are among the first to feel the impact of higher diesel prices,” Low added.
Low, who heads the party’s economic and SMEs affairs committee, pointed out that similar assurances had been made regarding electricity tariff hikes, however market prices eventually rose as businesses passed on the increased costs.
The MCA vice president added that companies already facing higher expenses for fuel, wages and rent have limited ability to absorb further increases, and urged the government to recognise the wider economic effects of diesel price adjustments, and to introduce targeted measures to reduce the burden on businesses and consumers.
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