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The Star
9 hours ago
- Business
- The Star
Eateries fear losing customers over commercial LPG costs, says association
Credit- LOW BOON TAT/The Star PETALING JAYA: Consumers will inevitably bear the brunt if food operators are forced to use commercial liquefied petroleum gas (LPG) in their operations, says a coffeeshop association. 'We do not want to pass down any costs as it does not solve any problems. 'At the end of the day, we will lose customers. Consumers will eat out less due to smaller spending power and ultimately, the impact comes back to us,' said Petaling Jaya Coffeeshop Association president Keu Kok Meng. He said the price of a bowl of noodles could increase by slightly more than RM1, when factoring in the cost of commercially priced gas cylinders. One subsidised LPG gas cylinder costs RM26 while the commercial variation is priced at RM70, marking an almost three times increase in cost. Citing the example of a stall selling prawn noodles, which uses two subsidised gas cylinders a day, costing a total of RM54, Keu said switching to commercial gas would increase the daily cost to RM140 daily. 'Lets say the stall sells 70 bowls of noodles a day, the price of a bowl may go up by slightly more than RM1. 'Passing down this cost will also not solve anything. 'It's been a tough time for hawkers. The best is to just allow the status quo. 'However, if enforcement under Ops Gasak does go ahead, an acceptable solution would be to allow stalls to have at least three subsidised gas cylinders visible on site,' he told a press conference on Tuesday (June 3). It was also attended by Petaling Jaya MP Lee Chean Chung. Keu said they had written to various stakeholders on this issue, including the Domestic Trade and Cost of Living Ministry (KPDN) and MPs, including MCA leaders. This comes after the ministry launched Ops Gasak, taking place from May 1 to Oct 31, to look into the misuse of subsidised LPG. MCA president Datuk Seri Dr Wee Ka Siong has been vocal on this issue, urging for hawkers to be given a clear assurance that they can continue using subsidised LPG so that food prices will not be raised. While the ministry previously said current enforcement measures only comprised advocacy, Keu claimed there was already action taken against a premises in Setia Alam, Selangor. 'It was extremely frightening when we heard about the seizures made. Imagine there are enforcement officers coming into the shop and say the Ops Gasak has begun, then asking for a permit,' he said, urging for more clarity on what this permit meant. 'Currently, we are clear on the permit which will allow users to store more than three cylinders but there is a grey area on whether these three cylinders can be used by the same party,' he said. MP Lee said he had sought for clarification on the matter from Selangor KPDN and said he will continue to help hawkers on this. He also proposed for the ministry to consult stakeholders like food courts, restaurants and coffeeshop operators as well as MPs before implementing such measures.
The Star
3 days ago
- Business
- The Star
Get ready to pay more at eateries
PETALING JAYA: Consumers will ultimately have to bear the cost as all eateries, including hawker stalls, are now required to use the 14kg commercial liquefied petroleum gas (LPG) cylinders, says Datuk Seri Dr Wee Ka Siong (pic). The MCA president said the use of the commercial cylinder is costlier by 170% compared with the household subsidised gas cylinder sold at just RM26. He said the cost of preparing food will be directly affected with the increase in the price of gas. 'What does the 170% increase have to do with the cost of living? 'If you want to eat rice or noodles, you have to cook it first. To cook, you need fire. For fire, you need gas. If the price of gas goes up, then the price of food will also go up. 'Who has to bear this price increase? The answer, of course, is consumers,' said the Ayer Hitam MP in a video posted on social media yesterday. He added that traders also need a permit if they use more than three 14kg LPG cylinders a month, and failing which, are subject to action under Op Gasak by the Domestic Trade and Cost of Living Ministry. According to Dr Wee, there was no need to be too strict on small-time food vendors who barely earn enough to make ends meet. He questioned why the government is unable to provide subsidies to small traders despite being the world's fifth largest exporter of liquefied natural gas. 'What is the point of billions of investments if we cannot cover gas subsidies, said to be RM3.4bil in 2024? 'What is the point of increasing the Sales and Service Tax (SST) rate from 6% to 8% if the revenue collected is not returned to the people through subsidies?' he added. As of May 1, eateries, including hawker stalls, will be required to use the 14kg purple-coloured commercial gas cylinders priced at RM70. The ministry also launched Op Gasak to combat any misuse of subsidised LPG and has so far made seizures amounting to RM883,000. On May 23, Domestic Trade and Cost of Living Minister Datuk Armizan Mohd Ali said the LPG subsidy cost the government RM3.4bil. He said that premises using more than three commercial gas cylinders must apply for a permit under the regulations of the Control of Supplies (Amendment) Act 2021. The government had planned the switch to commercial gas in 2019 but postponed its enforcement.
New Straits Times
3 days ago
- Business
- New Straits Times
NST Leader: Closing the 'leak' in gas subsidy abuse
IT comes as no surprise that retailers are once again manipulating subsidies. This time, large commercial kitchens and hawkers have been found misusing the supply of subsidised liquefied petroleum gas (LPG) cylinders meant for household cooking. Following this discovery, the government, effective May 1, prohibited restaurants and eateries, including hawkers, from using the subsidised LPG cylinders, priced at RM26 a unit. Instead, they were ordered to use purple 14kg cylinders at RM70 per unit. Additionally, kitchens must apply for an annual permit if they need more than three cylinders. From May 1 to 20, Domestic Trade and Cost of Living Ministry enforcement officers seized RM883,000 worth of goods from eateries found to be violating the directive. Why the ban? In exploiting an illegal loophole, these commercial kitchens bought the subsidised cylinders in bulk by deceiving mobile gas sellers into delivering them to homes under the false pretence of household use. The cylinders are then transferred to the commercial kitchens. The lower gas price leads to higher profit margins for these eateries, allowing them to sell dishes at RM28 or more, when the same dish might cost only RM8 to RM10 at food stalls. Commercial kitchens had been exploiting this loophole for years, but the current enforcement only partially addresses the problem. Previously, operators rarely absorbed spiked operating costs and instead passed them on to consumers. In this case, commercial kitchens have conveniently "blamed" the higher cost of their cuisine on the government's "subsidy withdrawal", which did not happen. Food and beverage industry trade representatives are appealing for understanding, requesting time to adjust to the new commercial LPG prices while also contesting the ongoing seizures. While this is happening, what actions can curb rising eatery costs? Food businesses could adjust menu prices, optimise cooking practices and explore alternative energy sources. Waste reduction and efficient supply chain management can also reduce costs. Crucially, any price adjustments should be communicated to customers. Commercial kitchens could also strategise by bulk purchasing, negotiating better supplier rates and optimising deliveries, especially e-hailing orders. They could use customer loyalty programmes and discounts to encourage repeat business during inflationary periods. While the food business overhaul incurs costs, the government could assist by setting commercial LPG prices to start at the RM30 to RM50 range, then gradually raise them. Also, government subsidies or programmes related to LPG and other energy sources should be easily available. If commercial kitchens can cleverly source cheaper LPG cylinders, they can apply similar creative skills to reduce fuel costs, ultimately keeping delicious cuisines affordable.
The Star
3 days ago
- Business
- The Star
Consumers will ultimately pay for eateries' use of non-subsidised gas, says Dr Wee
PETALING JAYA: Consumers will ultimately bear the cost of eateries using liquefied petroleum gas (LPG) for commercial use, which is 170% costlier than subsidised gas for domestic purposes, says Datuk Seri Dr Wee Ka Siong. The MCA president said eateries are required to use 14kg purple-coloured gas cylinders priced at RM70 each, as opposed to the green-coloured gas cylinders meant for domestic use, which cost RM26 each. "What does the 170% increase have to do with the cost of living? "If you want to eat rice or noodles, you have to cook it first. To cook, you need fire. For fire, you need gas. "If the price of gas goes up, then the price of food will also go up," he said in a video posted on social media on Saturday (May 31). "Who has to bear this price increase? The answer, of course, is consumers," he said. He added that traders also need a permit if they use more than three 14kg LPG cylinders a month, and failing which, are subject to action under Ops Gasak by the Domestic Trade and Cost of Living Ministry. Dr Wee also said there was no need to be too strict on small-time food vendors who barely earn enough to make ends meet. He questioned why the government is unable to provide subsidies to small traders despite being the world's 5th largest exporter of liquefied natural gas. "What is the point of billions of investments if we cannot cover gas subsidies, said to be RM3.4bil in 2024? "What is the point of increasing the Sales and Service Tax (SST) rate from 6% to 8% if the revenue collected is not returned to the people through subsidies?" he asked. As of May 1, eateries including hawkers will be required to use 14kg purple-coloured commercial gas cylinders priced at RM70 each. The ministry also launched Ops Gasak to combat any misuse of subsidised LPG and has made seizures amounting to RM883,000 so far. On May 23, the Domestic Trade and Cost of Living Minister Datuk Armizan Mohd Ali said LPG subsidies have cost the government RM3.4bil and said premises using more than 42kg of LPG (which amounts to three 14kg cylinders) must apply for a permit under the Control of Supplies (Amendment) Act 2021.
The Star
26-05-2025
- Business
- The Star
Eateries feeling the heat
Going purple: Under new rules, restaurants have to phase out the use of household gas cylinders. — MUHAMAD SHAHRIL ROSLI/The Star PETALING JAYA: As of May 1, all eateries, including hawker stalls, have been barred from using household subsidised gas cylinders. Instead, they have to use new purple 14kg commercial gas cylinders, which cost RM70 – almost three times the price of household subsidised gas cylinders, which are sold at just RM26. Industry players are also required to apply for a yearly permit if they want to have more than three such cylinders. The Domestic Trade and Cost of Living Ministry is now cracking down to ensure that the food and beverage industry complies. On May 1, the ministry kickstarted Ops Gasak to combat the misuse of liquefied petroleum gas (LPG) subsidies. Since then, officers have seized RM883,000 worth of goods from eateries deemed to have broken the rules. On May 23, minister Datuk Armizan Mohd Ali, who said the LPG subsidy cost the government RM3.4bil, clarified that premises using more than 42kg of LPG - or more than three cyclinders - must apply for a permit under the regulations of the Control of Supplies (Amendment) Act 2021. The government had planned the switch to commercial gas in 2019 but had put the enforcement on hold. Industry players, however, are still unclear about the requirements surrounding the implementation, warning that a switch to commercial gas could lead to a new round of price hikes. Petaling Jaya Coffeeshop Association president Keu Kok Meng said they are willing to comply with the implementation, but what comes with the switch to the more expensive gas must be made clear. 'The government must announce what comes with the switch of gas cylinders. This is because food at coffeeshops are priced competitively low. This change will affect our costs. 'We understand where the government is coming from but give us time to change and adapt,' he told The Star, adding that they have been given notice by their gas suppliers to apply for permits. He added that based on a survey of a noodle shop selling 70 bowls using two cylinders in a day, the price of noodles will see an increase of more than RM1 per bowl. Malaysian Indian Restaurant Owners' Association (Primas) president Govindasamy Jayabalan said they have written to the ministry to seek clarification on the matter. He also urged the ministry to give them some room to adapt instead of issuing summons or seizing items in their operations. 'The 50kg commercial gas cylinder was not practical to be placed inside the premises, so the 14kg commercial gas cylinder is a good move but the cost is high. 'On average, a small restaurant uses about 100 cylinders per month, so that comes to RM2,600, but now we will have to fork out RM7,000. So, you can see that cost will eventually translate to the price of food. 'We don't mind the switch but we urge the ministry and the government to hear our pleas, especially with the increase in the cost of raw materials. We were able to accommodate when they removed the egg subsidy, but this is too high,' he said. From May 1-20, a total of 74 cases were recorded with a seizure value of RM 883,000, the ministry's enforcement director-general Datuk Azman Adam said. He added that the ministry would use enforcement to ensure no one diverts subsidised goods meant for the people.
