PETALING JAYA: The jump in diesel prices has become a big bane for contractors and towing service providers, as their businesses are not entitled to receive fuel subsidies.
Because the hike in diesel prices has pushed up the cost of transportation and raw materials, these businesses have been forced to increase their prices to survive.
Penang Malay Contractors Association Malaysia (PKMM) president Datuk Seri Mohamed Fadzill Hassan said even daily rental cost for heavy machinery has increased with the floating of diesel prices.
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“For example, the rental for a backhoe was around RM358 per day, but it has now increased to RM600,” he said.
He added that the price of concrete had risen by at least 10% following the announcement of the diesel price float, though the exact figure has yet to be confirmed.
“Previously, we could budget RM80,000 to RM90,00 to build an 800-square-foot low-cost unit. Now that is impossible,” he said.
Mohamed Fadzill added this would, in turn, result in people struggling to afford homes due to the high cost.
He said contractors bought commercial diesel in bulk and not from petrol stations.
“We can’t receive any diesel subsidies this way, and with the increasing prices, I worry we will go out of business.
“The price increase is too high in a short period of time; hopefully the government can review prices,” he said.
Mohamed Fadzil claims that unmonitored businesses exploited the diesel price increase by raising their prices disproportionately.
Towing service owner Ocar Wong said that his company had applied for diesel subsidies since April but was swiftly rejected because their business did not meet the eligibility criteria.
“Now we have to increase prices by 20% to 30%,” he said.
Transportation services provider T. Harikrishna Rao said there had been no updates on his fleet card application under the Subsidised Diesel Control System (SKDS) programme, despite submitting it several weeks earlier.
He reckoned he may be left with no choice but to increase prices if his diesel subsidy application is not approved soon.
“We will try to cope for the time being, but even now, the price hike is too much, and we’re losing money,” he said.
He also lamented about a seemingly “lack of direction” from the authorities towards those who were eligible for subsidised diesel prices but were yet to receive their fleet cards.
“They advised us to keep our receipts, but even after a few days, the printed copies have faded, so how can they confirm our claims?”
