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

According to the Johor Bahru Trade Association in Malaysia, the association has approximatelyOut of 180 members, over 80% of them have businesses exporting goods to Singapore, covering multiple fields such as building materials, food, and industrial supplies. These businesses generally indicate that the rise in diesel prices will directly push up their transportation costs, and may have to consider transferring some of the costs to consumers.

Wang Junye, Acting President of Johor Bahru Trade Association, said in an interview:Many of our building materials are transported to Singapore, and with the rise in diesel prices, transportation costs have naturally increased. We do not rule out the possibility of transferring some of the 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 Malaysian Johor Bahru Small and Medium Enterprises Association has also expressed similar concerns. The guild ownsMore than 600 members are mainly engaged in food processing, decoration, manufacturing and other fields, with 30-40% of the members mainly targeting the Singapore market. Guild consultant Zheng Jisheng stated that merchants have begun to consider price adjustments and may conduct transactions at a new price at some point in the future.

Zheng Jishengexpress,Small and medium-sized businesses 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 the prices of goods.

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