KUALA LUMPUR: Tourism and business associations have cautioned possible goods and services price increase if the government does not implement the targeted subsidies in phases and with caution.
The Malaysian Association of Tour and Travel Agents (Matta) president Datuk Tan Kok Liang said there might be an increase in tourism-related prices as tour buses would not enjoy diesel subsidies like those in public transportation.
"Should there be a price hike, we should be able to increase the transportation rates for various destinations and tour packages with land transportation components in tandem with the fuel increase.
"Give us ample time notice so that we can advise our overseas counterparts for contract revision for 2024/2025," he said.
Tan's view was echoed by Malaysia Inbound Tourism Association president Uzaidi Udanis, who called for the government to include tour buses in the list of those who could benefit from the targeted subsidies.
He said the government should also implement the targeted subsidies in stages so that the tourism industry had more time to recover after the pandemic.
"If the government excludes us from the targeted subsidies, it will increase the cost of tourism overall. Tourists, of course, will weigh in the costs. Now, we have to even compete with neighbouring countries and new countries such as Saudi Arabia for tourism.
"If the government includes us in the targeted subsidy list, we might be able to attract more tourists and travellers, which subsequently contributes to the local economy, such as homestays," he said.
On Thursday, Domestic Trade and Cost of Living Minister Datuk Seri Salahuddin Ayub said the government would implement targeted fuel subsidies, including for RON95 petrol and diesel, starting next year.
Salahuddin revealed that multiple ministries, including the Domestic Trade and Cost of Living Ministry, Economy Ministry, Finance Ministry, Transport Ministry, and Investment, Trade and Industry Ministry, are in the process of creating an integrated database.
This database will facilitate the coordination of relevant data among the agencies and ministries.
The mechanism would be finalised by year-end.
Associated Chinese Chambers of Commerce and Industry of Malaysia treasurer-general Datuk Koong Lin Loong advised the government to cut the subsidy in phases to avoid inflation and so that industry players could cope with the rising cost of logistics.
Koong said the rising cost of logistics due to unsubsidised fuel would cause the price and goods and services to increase.
He suggested that the government created a subsidy account which could cushion the impact should there be any increase in the price of fuel.
"For example, let's say the market price for fuel is RM4 per litre, we could charge the people RM3, subsidising RM1.
"Should the price of fuel decrease to RM3.50, we should still charge the people RM4.00 and the additional RM0.50 could be put in the subsidy account.
"This could cushion the impact should the market price increase. This way, the government does not need to spend more," he said, adding that this could also stabilise the fuel price in Malaysia.
Meanwhile, Pan Malaysian Bus Operators Association (PMBAO) president Datuk Mohamad Ashfar Ali said the government should increase the quota for diesel subsidies for express and stage buses as it was insufficient for daily use.
"We have advised them (the government) to do two things - to lower the diesel price and to increase the amount (quota) of diesel that each bus is allowed to have.
"We do not have any details yet (regarding the targeted subsidy). So, we will have to wait until the ministry comes out with more details because this is the three-pronged approach by it," he added.
Currently, the diesel subsidy quota is 2,880 litres for express buses and 1,500 litres for stage buses and PMBAO had suggested for it to be increased to 5,000 litres.
If the buses exceed the subsidised amount of fuel and need more for their use, they have to pay the original amount of RM2.15 per litre, while the subsidised price is RM1.88.
"Our bus rates have been fixed since 2018, but the prices of insurance, buses and tires have increased. So we appeal to the government to increase the quota for diesel subsidies," he said.