Malaysian MSMEs face potential 50% fuel cost surge from West Asia conflict, threatening sectors like textiles and steel with global supply chain disruptions.
SHAH ALAM: Fuel costs among micro, small and medium enterprises (MSMEs) in the country are at risk of soaring by up to 50 per cent of total operating costs if the conflict in West Asia continues.
SME Corporation Malaysia chief executive officer Rizal Nainy said the increase could occur following the rise in global oil prices, which have now surpassed US$100 per barrel and are expected to continue to rise if the conflicts do not ease.
He said the situation would affect the global supply chain, thus directly impacting the import and export activities of MSMEs, especially sectors that rely on raw materials such as textiles, cement and steel.
“According to a survey by SME Corp, fuel costs currently only contribute around 6.4 per cent of the total operating costs of MSMEs.
“However, if the crisis is prolonged, the percentage may increase by up to 50 per cent and put great pressure on business continuity,” he said after the 2026 Hari Raya Muhibbah Ceremony at the Elmina Rainforest Knowledge Centre here today.
Also present at the ceremony was the Selangor State Youth, Sports and Entrepreneurship exco member Mohd Najwan Halimi.
Meanwhile, Rizal said that although the food and beverage sector has yet to feel a significant impact, cost pressures are expected to increase in the medium term.
He said MSMEs are urged to immediately diversify export markets to reduce dependence on high-risk regions such as West Asia.
He said logistic strategies need to be adapted, including the use of alternative routes even if they involve higher shipping costs.
“SME Corp also provides guidance on free trade agreements involving 16 agreements to open up new market opportunities because of the 1.1 million MSMEs in the country, with 15 to 16 per cent involved in international trade and are expected to be affected by the increase in costs.
“MSMEs are also urged to improve operational efficiency through digitalisation, in addition to preparing contingency plans to deal with the current economic uncertainties,” he said.
