'Consumer goods will be pricier due to toll hike'

The Federation of Malaysian Manufacturers (FMM) has warned that an increase in tolled road charges will raise prices of consumer goods.

 

In a press release today, FMM said that a survey among its members revealed that higher toll charges would result in an increase in the price of raw materials.

 

This would subsequently lead to higher operating cost for manufacturers, which will be passed down to consumers.

 

"Given the recent increase in electricity rates, the proposed toll hikes would definitely put pressure on inflation and FMM foresees that these increases would dampen domestic consumption and affect export competitiveness.

 

"FMM strongly urges the toll concessionaires to review their decision to increase the toll rates and the government to intervene to prevent any further increase in the cost of doing business in Malaysia," said FMM.

 

FMM did not state the number of respondents involved, but specified that 68 percent of its members are SMEs operating in the Klang Valley. 

 

The group said that all respondents agreed that transportation providers will increase their fees if toll charges were increased, coupled with an increase in travelling claims of their marketing staff.

Forty-six percent of respondents believe that the price of transportantion will go up by 2 to 10 percent, while 18 percent of respondents said 11 to 20 percent and 15 percent of respondents said 25 to 30 percent.

No alternatives

 

Lebuhraya Damansara Puchong (LDP) is the most frequently used highway among the respondents, followed by the Guthrie Corridor Expressway, Kajang Dispersal Link Expressway (Silk), Sungai Besi Expressway (Besraya) and Sistem Penyuraian Trafik KL Barat (Sprint).

 

"A total of 64 percent of the respondents informed that they or their transporters do not have alternative routes to deliver goods to points of destination," said the group.

 

Highway toll charges were supposed to increase on Jan 1, but nothing has been heard of since. 

 

Tolled road operators generally have an agreement with the federal government which allowed them to periodically increase charges. 

 

Should Putrajaya stop them from increasing the charges, compensation - either through subsidies or extension of concession period - would be arranged.

 

The Najib-administration is currently under pressure to keep the prices of essential goods down while reigning in on a budget deficit.

 

Since the 13th general election in May last year, Putrajaya has abolished sugar subsidies and reduced fuel subsidies, while increasing electricity tariffs to reduce public spending.

 

However, critics belive that Putrajaya should prioritise plugging leakages and rooting out corruption before increasing the financial burden of the public.