“Diesel is not an isolated cost. It is a key input across the entire economic system. Once prices rise, the impact quickly spreads through transport charges, delivery costs, raw materials, food prices, construction costs, and service fees. Ultimately, these increases are borne by consumers across the country,” said National President Dr Chin Chee Seong
He emphasised that the issue is not about how many directly use diesel, but how diesel-related costs are transmitted across the supply chain and reflected in overall living costs. “Even those who do not use diesel directly will still be affected through higher prices of goods and services. This is an economy-wide issue.” Dr Chin noted that SMEs are already dealing with rising costs in fuel, logistics, labour, rental, financing, and regulatory compliance.
Most SMEs will try to absorb initial cost increases. However, sustained pressure will force businesses to tighten cash flow management, delay expansion, scale back hiring plans, and eventually adjust prices. This will have knock-on effects on the wider market and consumers. To help businesses manage rising costs and maintain economic stability, the Association urged the Government to implement targeted and time-sensitive measures.
Among the immediate priority measures proposed is short-term cash flow relief, including a targeted six-month loan repayment moratorium or flexible repayment arrangements, temporary loan restructuring or reprofiling without penalties, and expedited tax refund disbursements to improve liquidity.
The Association also called for a temporary deferment of SST obligations through a three to six-month deferment or flexible payment arrangement for SST-related obligations to ease immediate cash flow pressures on SMEs and reduce the risk of cost pass-through to consumers.
To strengthen access to financing, the Association proposed expanding emergency financing facilities to at least RM500 million, providing low-interest working capital support for operational expenses, and strengthening SJPP guarantees while streamlining approval processes.
It also urged cost mitigation measures, including maintaining fuel cost stabilisation mechanisms during periods of volatility, introducing temporary flexibility for selected taxes and statutory payments, and providing targeted support for affected sectors such as logistics, transport, food services, construction, retail, and tourism.
The Association further called for improved policy clarity and predictability by enhancing transparency in fuel pricing mechanisms, ensuring timely adjustments in line with global oil prices, and providing clear policy direction to support business planning.
Dr Chin stressed that diesel price increases must be addressed as a broader economic and cost-of-living issue, rather than a sector-specific concern. “When a key cost like diesel rises, the impact does not stop at one sector. It cascades through the economy and ultimately affects household expenses. Early and practical intervention is critical to stabilise prices and sustain economic confidence.”
