Govt expects stable construction material prices, supply as diesel prices moderate

KUALA LUMPUR (July 9): The government expects construction material prices and supply to remain stable after fuel prices moderated following tempered tensions in West Asia.

Based on weekly monitoring, increases in prices of the seven main construction materials peaked in March and April at 13.3%, Works Minister Datuk Seri Alexander Nanta Linggi said, but he noted that there has been no sharp increase overall.

“In view of the latest developments in diesel prices, it is expected that the prices and supply of construction materials will remain stable,” Alexander said in a written parliamentary reply on Wednesday.

Looking at retail cement and diesel prices, data for which the Ministry of Domestic Trade and Cost of Living began collecting data in May 2026, prices are heavily influenced by retail diesel prices in each state.

Up to June, no cement supply shortage was reported, while the highest retail cement price reached RM28 per bag in Labuan and Sarawak. Wholesale cement price remained at RM24 per bag.

The minister was responding to a question from Hulu Selangor MP Mohd Hasnizan Harun on the government’s contingency plans to ensure road maintenance and critical infrastructure projects remained unaffected by uncertainty over diesel prices and logistics costs arising from the West Asia conflict.

Overall construction costs up 5-10%

In a separate written parliamentary reply, Alexander noted that overall construction costs have risen by 5% to 10% on elevated fuel prices due to the West Asia conflict.

“For the national construction sector, the increase in fuel costs, particularly diesel, has resulted in significant increases in factory production costs, material processing costs and the logistics costs of transporting construction materials to project sites," he said.

One of the main implications, he noted, is an estimated 5% to 10% increase in overall cost of construction projects compared with their original contract cost estimates.

“To address these risks, the Ministry of Works, together with the Public Works Department and Construction Industry Development Board, continuously carries out close monitoring and effective on-site project supervision to reduce the burden on contractors,” he said.

Alexander was responding to Saratok Member of Parliament Datuk Ali Biju's queries on the impact of increased global construction material costs on the original allocation ceiling for federal government projects in Sarawak under the 12th Malaysia Plan (12MP), and whether the government will approve additional allocations to prevent the affected projects from being abandoned.

The minister said the government is deeply concerned about the continued implementation of public infrastructure projects, particularly those under the 12MP, but noted that projects remain subject to existing allocation ceilings.

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