KUALA LUMPUR: The West Asia conflict could add RM1.1bil to the construction industry’s diesel bill in 2026, given the higher average diesel price since the turmoil began, Juwai IQI co-founder and group chief executive officer Kashif Ansari says.
He added that this was a significant but manageable challenge, and that both the government and industry were well placed to handle it.
“The conflict had dragged on and occasionally flared up, with no permanent settlement yet reached. The higher diesel costs work out to an average of about RM2,000 per new home.
“That adds a cost the industry can manage, to a sector the country relies on for affordable housing. The encouraging part is that the government and industry already have practical ways to keep new housing on track,” Kashif said in a statement on Monday.
He noted that according to the weekly fuel prices published by the Statistics Department for the week of Feb 26, 2026, the diesel price before the conflict was RM3.04 a litre, and across the 20 weeks since the conflict started, diesel had averaged RM4.80 a litre, an increase of 57.7%.
“To estimate the possible cost if conflict-time diesel prices continue throughout the rest of 2026, we simply applied the 57.7% average increase to the amount of unsubsidised diesel the construction industry will use during that time.
“The result is a total of about RM1.1bil in extra costs, or roughly RM25mil a week,” he added.
Kashif said that at its highest, the price hit RM6.72 in the week of April 9.
“Malaysia’s construction sector uses an estimated 1.4 billion litres of diesel a year. Using Statistics Department figures, we estimate roughly half, or about 740 million litres, of that diesel is bought at the full, unsubsidised market price,” he added.
Kashif said the construction industry benefited from subsidised diesel, but few people realise that off-road machinery, such as excavators, cranes, piling rigs and generators, does not qualify and pays the full market price.
He noted that when the government reformed the diesel subsidy, it kept protections for commercial fleets, so many vehicles are still able to buy diesel at RM2.15 a litre under the subsidised diesel control system fleet-card system, well below the market price.
Kashif said the subsidy reform has worked well, saving billions while shielding the vehicles that keep the economy moving.
“The government could build on that success by adding ready-mixed concrete trucks, concrete mixer trucks and cranes to the subsidised fleet-card scheme. These vehicles are all vital to construction and are big users of diesel,” he added.
Kashif said the government could increase the quotas for contractors in rural and interior areas, given that they need to drive longer distances. — Bernama
