KUALA LUMPUR (June 11): A slew of businesses announced price hikes for their goods and services on Monday (June 10), with some ascribing the move to the removal of diesel subsidies in Peninsular Malaysia.

Hardware store operator Chuan Soon Heng Sdn Bhd, in a notice to customers, said its transportation costs have been raised "sharply" due to the subsidy cut, with its transporters and suppliers increasing their trucking charges by 25%.

“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 their transportation charges also will be revised. This price increase will be effective immediately,” the notice added, without specifying the range of increase of its product prices.

Among those raising prices were concrete sellers such as Kelantan-headquartered DPG Readymix Sdn Bhd and Pahang’s LCS Marketing Sdn Bhd. Both cited the increase in diesel prices as the reason for doing so in their notices to customers.

“Due to the increase in diesel prices, we anticipate a subsequent rise in raw material and transportation costs. As a result, we would like to inform you that effective from June 10, 2024, all our concrete prices will be increased by RM12 per cubic metre within a 30km distance. For distances exceeding 30km, additional charges will apply, and you may refer to our marketing representatives for further details,” said LCS.

Johor towing services provider Hong Guan Towing Service also announced that “all towing charges will be increased in accordance with our operating costs,” adding that “no subsidy is allocated to tow trucks”.

Local food and beverage chain Kopi Hainan HQ also announced a 50 sen increase to its 22oz Hainanese coffee to RM4.50 starting July 15. But it said this has nothing to do with diesel. Instead, it blamed it on the hike in prices of raw materials such as milk, plastic cups and more recently coffee beans.

The government announced the subsidy removal on Sunday, hours before the measure took effect after midnight, and said the move is expected to save the government RM4 billion a year. This raised the pump price of diesel at all retail stations in the peninsula at RM3.35 per litre, up RM1.20 from previously. Retail price of diesel fuel in Sabah, Sarawak and Labuan remains at RM2.15 per litre.

Even with the price increase, diesel pump price remains the second lowest in Asean after Brunei, where diesel is sold at RM1.09 per litre, according to the government.

To mitigate the impact on domestic prices, selected sectors have been approved to purchase diesel at subsidised rates. The lowest rate is RM1.65/litre, which is for fishermen, followed by RM1.88/litre for land public transport under the Subsidised Diesel Control System (SKDS) 1.0, and RM2.15/litre for eligible logistics vehicles via a fleet card mechanism under SKDS 2.0.

Separately, a monthly aid of RM200 will be given to eligible individuals, small farmers and smallholders with non-luxury diesel-powered vehicles under the Budi Madani cash assistance scheme.