JOHOR BARU - The Small and Medium Industries (SMI) Association of Malaysia has indicated it will pass on its costs to consumers following the 20 sen (S$0.08) increase in the price of RON95 petrol and diesel.
Its president Teh Kee Sin said businesses could no longer absorb the increase.
He said transportation and petroleum costs were the two main components in the manufacturing sector, representing between 30 per cent and 50 per cent of the operating cost.
"You need lorries to transport raw materials and deliver the finished goods to your clients. All these need diesel," he said.
Teh said another issue which worried the SMIs was whether the Goods and Services Tax (GST) would be included in the price of diesel and petrol, adding that the Government had yet to decide on this.
"Petrol is no longer a cheap commodity in Malaysia," he added.
Johor Lorry Operators Association president Anthony Tan concurred with Teh, saying many of its association members would increase their charges to mitigate the diesel hike.
He said many lorry operators were caught by surprise with last week's diesel increase, citing a similar situation in September last year when the diesel price also went up by 20 sen.
"Lorry operators in Johor are the most hard-hit group as we have to also pay higher toll rates at the JB CIQ and Singapore Causeway," Tan claimed.
He believed the rise in diesel price would not help curb diesel smuggling, saying such cases were still rampant when the diesel price went up in September last year.
Johor Port Shipping and Forwarding Association president Michael Cheah said its members would not absorb the increase in diesel price this time.
"In September 2013, we didn't increase our haulage charges. Now, we have no choice but to pass it on to our clients as our operating cost is escalating," he said.