Many business operators sticking to diesel for now

The government set the price of diesel in the peninsula at RM3.35 per litre starting June 10. — ONG SOON HIN/The Star

PETALING JAYA: The majority of business operators are not contemplating transitioning to vehicles that run on greener fuel for now, even as diesel prices increased to RM3.35 per litre from RM2.15, following a recent rationalisation.

They said it was not financially viable to do so and there were not many options of greener vehicles currently suitable for industrial use.

SME Association of Malaysia secretary-general Chin Chee Seong said this was because most diesel vehicles and machinery in use, like generators, agricultural machinery and lorries, are high-powered.

“Although electric vehicles stand out as a viable alternative to diesel, the high costs associated with transitioning to electric vehicles, particularly for industrial purposes, pose a barrier.

“This makes it not viable for SMEs in the short term,” he said in an interview yesterday.

While the diesel subsidy has been rationalised, Chin said most SMEs still benefitted from it, making it impractical to switch to greener vehicles in the foreseeable future.

Federation of Malaysian Freight Forwarders president Datuk Tony Chia said although the diesel subsidy rationalisation and proposed RON95 subsidy withdrawal were pushing considerations for switching to alternative fuel vehicles, primarily electric ones are still in the experimental phase for goods transportation.

“Other alternatives like hydrogen and methanol-powered vehicles are gaining interest, yet the transition remains modest due to limited electric vehicle charging stations,” he said.

Chia noted that electric vehicles presented a quick alternative, while solar energy had proven successful in powering ships and could be a viable option for coastal vessels.

“Liquefied natural gas is a potential alternative too, although the availability of sufficient fueling stations remains a concern.

“Additionally, biofuel could be a more readily accessible option, particularly for transport vehicles.”

Federation of Vegetable Farmers Association of Malaysia chairman Lim Ser Kwee said it was very unlikely farmers would change their diesel vehicles.

He said there was no replacement even for water irrigation pumps, which use large amounts of diesel.

“We cannot switch to solar energy as it is not powerful enough,” he said.

The increased diesel prices have a big impact on vegetable farmers, and he hopes that the government will review the eligibility criteria for diesel subsidies.

“Otherwise, a lot of smaller farmers will not be able to sustain their operations. For now, we are still covering the additional cost on our own,” he said.

An oil palm smallholder in Ipoh, Ho Yuk Choy, 57, finds the electric vehicle landscape in Malaysia not mature enough to sustain long-distance transportation.

“Currently there are no electric alternatives, and I don’t see this changing in the next two to three years,” he said.

He has three diesel-powered vehicles for his plantations, and after the removal of the subsidy, it costs him RM1,000 more.

He added that palm oil millers’ transportation costs had increased by RM20 per tonne after the rationalisation.

A durian farmer in Muar, Sia Jwee Hoe, 66, may consider green vehicles if there are viable innovations.

Sia’s orchards have water pumps that use a substantial amount of diesel, so he is considering using solar power.

He said the sudden floating of diesel prices had affected his operation cost by up to 30%.

He applied for a subsidy but found that he was ineligible.

The government launched the Budi Madani initiative on May 28 to distribute cash assistance for diesel subsidies. This assistance is provided directly to diesel vehicle owners under the Individual category and to small-scale farmers and growers under the Agri-Commodities category.

The Budi Madani initiative is designed to reduce subsidy leakages across Malaysia.