SHAH ALAM: Allowing loan moratoriums for companies affected by rising diesel prices would help ease mounting financial strain on businesses, particularly small and medium enterprises (SMEs), said Selangor MCA chairman Datuk Lawrence Low.
In urging Putrajaya to adopt measures similar to those implemented during the Movement Control Order (MCO), he warned that escalating fuel costs are severely disrupting companies’ cash flow.
He said the party is appealing for immediate intervention, including temporary loan deferments and financial assistance, to help businesses stay afloat.
“There is a mechanism the government can implement, as seen during the MCO, namely a loan moratorium for affected companies.
“This is crucial because cash flow is now being severely impacted, especially for SMEs,” he said during a press conference at the Selangor MCA headquarters here on Tuesday (March 31).
Low also called for the establishment of a special committee comprising key ministries, including the Transport Ministry, Finance Ministry, Works Ministry, Housing and Local Government Ministry, as well as Investment, Trade and Industry Ministry, to engage directly with industry players.
“We urge the government to form a special committee and immediately hold dialogues with NGOs, SMEs and associations so it can better understand the impact of diesel price increases,” he said.
Highlighting the scale of the increase, Low said diesel prices had surged by RM2.53, or 84.6%, over the past six weeks - from RM2.99 per litre between Jan 29 and Feb 25 to RM5.52 per litre currently.
He noted that prices rose incrementally at first, from RM3.04 per litre (+1.67%) and RM3.12 (+2.63%), before jumping sharply by 80 sen in three consecutive weeks - to RM3.92 (+25.64%), RM4.72 (+20.41%) and RM5.52 (+16.95%).
“These substantial hikes have disrupted operators’ cost structures almost overnight. Fuel costs make up a significant portion of their expenses,” he said.
Low said many operators, particularly SMEs, are now struggling to sustain daily operations, with mounting losses and some at risk of reducing services or shutting down altogether.
“This will not only affect operators but also workers and manufacturers who rely heavily on their services,” he said, adding that factory bus operators play a critical role in transporting thousands of workers to industrial zones daily.
He added that MCA has received numerous complaints from affected businesses, warning that disruptions could lead to job losses and severe consequences for the SME sector.
Low also questioned the pricing mechanism, pointing out that global crude oil prices had recently fallen below US$100 per barrel, yet diesel prices in Malaysia continued to rise by 80 sen per litre.
“Many are asking what formula is being used. We hope the government can explain this clearly to the rakyat and operators,” he said.
He cautioned that if industry players are forced to pass on higher costs, consumers will ultimately bear the burden, potentially triggering broader inflationary pressures.
“We are concerned that this could lead to another wave of inflation. If all industries increase prices, the negative impact will be felt across the economy,” he said.
Low added that some sectors, particularly construction and other diesel-intensive industries, have already temporarily halted operations due to high costs and uncertainty.
He said MCA would continue to provide a platform for dialogue with SME players to address their concerns.
