SHAH ALAM: Fuel costs for Malaysia’s micro, small and medium enterprises (MSMEs) could surge to as much as 50% of total operating expenses if the conflict in the Middle East extends beyond May.
SME Corporation Malaysia (SME Corp) chief executive officer Rizal Nainy said the increase could materialise in tandem with rising global oil prices, which have now exceeded USD100 (RM392.40) per barrel.
He said the ongoing geopolitical tensions involving Iran, the United States and Israel would place significant strain on businesses, particularly those in logistics and other trade-dependent sectors.
“At present, fuel costs account for about 6.4% of total MSME operating expenses.
“However, this could rise sharply to as much as 50%, placing significant pressure on business sustainability if the crisis continues beyond May.
“The risks spreading across major shipping routes — including higher insurance premiums, logistics and shipping costs, as well as delays in the movement of goods — are further impacting MSMEs,” he said when met at a Hari Raya programme at the Elmina Rainforest Knowledge Centre on Saturday (March 28).
Rizal added that industries heavily reliant on imports and exports, such as textiles, cement and steel, are particularly vulnerable under the current conditions.
While the food and beverage (F&B) sector has yet to experience a significant immediate impact, he said cost pressures are likely to emerge over the longer term due to rising oil prices.
“As such, MSMEs need to reassess their strategies, including diversifying export markets to reduce reliance on high‑risk regions.
“They must adapt quickly by diversifying markets and strengthening resilience, as ongoing uncertainties could further disrupt trade and increase costs,” he said.
