Fuel expenses could account for up to 50% of micro SME costs as oil prices rise, says SME Corp

SHAH ALAM, March 28 — Fuel costs for micro, small and medium enterprises (MSMEs) in Malaysia could surge to as much as 50 per cent of total operating expenses if tensions in West Asia persist.

SME Corporation Malaysia chief executive officer Rizal Nainy said the spike would be driven by rising global oil prices, which have already exceeded US$100 (RM393) per barrel and may continue climbing if the conflict remains unresolved.

He noted that prolonged instability would disrupt global supply chains, directly affecting MSME import and export activities — particularly in sectors dependent on raw materials such as textiles, cement and steel.

“Based on an SME Corp survey, fuel costs currently account for about 6.4 per cent of total operating expenses.

“However, if the crisis continues, this figure could rise to as high as 50 per cent, placing significant strain on business sustainability,” he said after attending the 2026 Hari Raya Muhibbah Ceremony at the Elmina Rainforest Knowledge Centre today.

Also present was Selangor Youth, Sports and Entrepreneurship executive councillor Mohd Najwan Halimi.

Rizal added that while the food and beverage sector has yet to feel a major impact, cost pressures are expected to build over the medium term.

He urged MSMEs to diversify export markets to reduce reliance on higher-risk regions such as West Asia, and to adjust logistics strategies — including exploring alternative shipping routes, even if costs are higher.

“SME Corp also offers guidance on 16 free trade agreements to help businesses tap into new markets. Out of 1.1 million MSMEs nationwide, about 15 to 16 per cent are involved in international trade and are likely to be affected by rising costs.

“Businesses are also encouraged to enhance operational efficiency through digitalisation, while preparing contingency plans to navigate ongoing economic uncertainties,” he said. — Bernama