The Federation of Malaysian Business Associations said that while large-scale WFH arrangements could generate fuel subsidy savings of about RM169 million a month, the broader economic fallout could be significantly larger.
“Reduced urban consumption, especially in the Klang Valley, may result in losses of between RM320 million and RM495 million monthly, around 2.9 times higher than the projected savings,” Chris Daniel Wong, a council member of the federation, said.
“Taking into account multiplier effects estimated at between 0.75 and 1, the total economic contraction could rise to between RM480 million and RM1 billion a month, effectively offsetting any fiscal gains,” he said in a statement.
Wong estimated monthly losses of RM100 million to RM180 million in the food and beverage sector, RM75 million to RM125 million in retail, and RM150 million to RM250 million among petrol stations resulting from the WFH policy.
Public transport and ride-hailing services could see losses of between RM60 million and RM90 million a month, while parking and toll revenues may decline by RM25 million to RM40 million.
He noted that petrol stations are particularly vulnerable because of their volume-based, low-margin structure, combined with high fixed operating costs such as labour, utilities, rent, and compliance.
From April 15, employees at government ministries, agencies, statutory bodies and GLCs will be allowed to work from home, while private firms have been encouraged to adopt similar measures.
The move comes amid rising fuel costs following disruptions to global supply chains in the wake of the Middle East conflict.
Brent crude prices have surged past US$100 since the conflict escalated in late February.
Malaysia’s fuel subsidy bill is estimated at around RM4 billion a month, as Putrajaya maintains the subsidised RON95 price at RM1.99 per litre under the BUDI95 scheme alongside targeted diesel subsidies.
However, it temporarily reduced the subsidised RON95 quota from 300 litres to 200 litres a month, effective April 1.