Singapore pizza shop owner Roy Chan has ridden out more than one business shock – from the Covid-19 pandemic to US tariff pressures – but he now sees another looming threat.
Suppliers for ingredients used at his Goldenroy Sourdough Pizza restaurant had warned prices could soon rise by up to 30 per cent following a surge in oil prices due to the escalating Iran war, Chan said.
“Delivery providers have not increased prices yet, but it may come in the next few weeks or months,” he added.
Like Chan, many Southeast Asian operators of small and medium-sized enterprises (SMEs) are bracing themselves for higher operating costs as fuel prices surge alongside the conflict raging across the Middle East.
Southeast Asia trades less with the Gulf region than major economies such as China and the United States, but businesses are still exposed because higher oil prices quickly feed through into freight, logistics and travel costs.
Singapore’s Goldenroy Sourdough Pizza has been warned by its suppliers about impending price increases. Photo: Kolette Lim
Observers say SMEs are likely to be hit hardest by the shock because they have less capital than their larger counterparts to absorb sudden increases in operating costs.