Recently, the Malaysian government decided to cancel diesel subsidies, and this policy adjustment immediately caused a huge uproar in the market, especially for businesses that rely on diesel for long-distance transportation, their transportation costs have significantly increased. This not only affects the operations of local businesses in Malaysia, but also has a potential impact on the prices of imported goods in neighboring Singapore.

According to the Johor Bahru Association in Malaysia, the association has approximately180 members, of which over 80% have business exporting goods to Singapore, covering multiple fields such as construction materials, food, and industrial supplies. These merchants generally indicate that the increase in diesel prices will directly push up their transportation costs, and may have to consider passing on some of the costs to consumers.

During an interview, Wang Junye, Acting President of the Johor Rory Trade Association, stated:"Many of our building materials are transported to Singapore, and with the rise in diesel prices, transportation costs have naturally skyrocketed. We cannot rule out the possibility of transferring some costs to consumers, but the specific amount of transfer will depend on market supply and demand and fluctuations in fuel prices." He further pointed out that this change has a particularly significant impact on the construction related industry.

At the same time, the Johor Bahru Small and Medium Enterprises Association in Malaysia has also expressed similar concerns. This guild hasMore than 600 members, mainly engaged in food processing, decoration, manufacturing and other fields, with 30-40% of members mainly targeting the Singapore market. Guild consultant Zheng Jisheng stated that merchants have begun to consider price adjustments and may conduct transactions at new prices at some point in the future.

Zheng JishengRepresent,Small and medium-sized business owners believe that they cannot do business at a loss, so price increases are inevitable. He also emphasized that although transportation costs are not the largest expense in the operating costs of small and medium-sized enterprises, the cancellation of diesel subsidies will have a chain effect, leading to an overall increase in supply costs, ultimately reflected in commodity prices.

For this policy adjustment, market analysts believe that the Malaysian government's cancellation of diesel subsidies is due to fiscal pressure and long-term considerations for promoting energy efficiency. However, in the short term, this change undoubtedly brings considerable pressure to businesses and consumers.