Samsuri said the sudden increase in the price of diesel has affected businesses in several sectors, which have gone on to announce price hikes.

Yesterday, FMT reported that vehicle-towing companies and concrete producers have raised their prices following the hike in the price of diesel as they said they are ineligible for diesel subsidies.

“We are aware that targeted subsidies are necessary to address leakages and wastage. However, the federal government needs to consider its effects, especially on the cost of living.

“This is a big challenge for the federal government to manage … I wish them good luck,” Sinar Harian quoted the Kemaman MP as saying while attending a programme in Kuala Terengganu today.

On Sunday, second finance minister Amir Hamzah Azizan announced that the government had set a new diesel price of RM3.35 per litre with effect from Monday.

Amir said RM3.35 per litre was the market price without subsidies, based on the average for May, according to the automatic pricing mechanism formula. The price will be reviewed every week.

The previous price of diesel, at RM2.15 per litre, will be maintained for Sabah, Sarawak and Labuan.

Prime Minister Anwar Ibrahim previously said the government is expected to save about RM4 billion a year with targeted diesel subsidies.

The government has launched the Budi Madani programme to ensure that subsidies are allocated to those who truly qualify and to reduce the burden of those in need, through the provision of monthly cash assistance of RM200.