Sabah and Sarawak’s unique geography and infrastructure underpin the federal decision to retain diesel subsidies, shielding residents from higher living costs.
KOTA KINABALU: The federal government’s decision to maintain diesel subsidies for Sabah and Sarawak is rooted in the unique geographical and infrastructural challenges faced by the two states.
Minister in the Prime Minister’s Department (Sabah and Sarawak) Datuk Mustapha Sakmud said the distinct geography, logistical costs and development challenges are carefully considered in national policy. He stated that any changes to fuel policy have a direct impact on daily life and local economic activities in the region.
Residents in both states will continue to enjoy subsidised diesel at RM2.15 per litre under controlled usage. They also benefit from the Budi MADANI RON95 (BUDI95) quota priced at RM1.99 per litre with a monthly cap of 200 litres.
Mustapha expressed appreciation to Prime Minister Datuk Seri Anwar Ibrahim for addressing the needs of Sabah and Sarawak. He urged all parties, including consumers and industry players, to ensure the policy is implemented effectively for public benefit.
The Prime Minister announced the temporary adjustment of the BUDI95 individual quota from 300 to 200 litres monthly, effective April 1. He confirmed Sabah and Sarawak would retain the RM2.15 per litre diesel subsidy despite rising global prices.
The cap for e-hailing drivers and gig workers remains at up to 800 litres, considering their work nature. Over 400,000 vehicles in the public and goods transport sectors remain covered under targeted subsidy schemes like the SKDS and SKPS.
An economist highlighted the heavy reliance on diesel in Sabah and Sarawak extends beyond transport to electricity generation and fishing. Assoc Prof Dr Mustazar Mansur of UKM said subsidies are crucial for stabilising basic goods prices, as many supplies are shipped from Peninsular Malaysia.
He noted the geographical structure and generally lower income levels result in greater diesel dependence, including for generators. Mustazar warned that increased fuel costs would raise logistics expenses and ultimately consumer prices.
Current government controls on diesel supply quantities aim to encourage more prudent usage amid global uncertainties. Mustazar stressed the importance of accurate subsidy channelling to those who genuinely need them.
He called for continued grassroots engagement to understand how policies affect daily lives. “We need to hear from the people on the ground, as they are the ones directly affected,” he said.