Kuala lumpur: The Federal Government's decision to maintain diesel subsidies for Sabah and Sarawak reflects the unique geography and infrastructure challenges faced by residents in both states. Minister in the Prime Minister's Department (Sabah and Sarawak), Datuk Mustapha Sakmud, emphasized that while the government is temporarily adjusting fuel subsidies to ensure more sustainable fiscal management amid global energy price uncertainty, the move demonstrates that the MADANI Government remains attentive to the needs of people in Borneo.
According to BERNAMA News Agency, Mustapha noted that the distinct geography, logistical costs, and development challenges in Sabah and Sarawak are carefully considered in every national policy decision, particularly given the relatively high diesel usage in both states. Any changes to fuel policy have a direct impact on daily life and local economic activities.
He further stated that residents in Sabah and Sarawak will continue to enjoy subsidised diesel at RM2.15 per litre under controlled usage, alongside the Budi MADANI RON95 (BUDI95) quota priced at RM1.99 per litre with a monthly cap of 200 litres. Mustapha highlighted the importance of all parties, including consumers, industry players, and enforcement agencies, playing their roles in ensuring the policy is implemented effectively and benefits the public as a whole.
Mustapha also expressed gratitude to Prime Minister Datuk Seri Anwar Ibrahim for addressing the needs of Sabah and Sarawak in the policy's implementation. Anwar announced in a special address that the government will temporarily adjust the BUDI95 individual quota from 300 litres to 200 litres per month beginning April 1, due to the conflict in West Asia, while maintaining the subsidised RON95 price at RM1.99 per litre.
He also announced that the cap for e-hailing drivers and gig workers will remain at up to 800 litres, taking into account the nature of their work, while Sabah and Sarawak will continue to benefit from the RM2.15 per litre diesel subsidy despite rising diesel prices. The Ministry of Finance previously stated that more than 400,000 vehicles in the public and goods transport sectors, including express buses, taxis, lorries, and trailers, will remain covered under targeted subsidy schemes such as the Subsidised Diesel Control System (SKDS) and the Subsidised Petrol Control System (SKPS).
Meanwhile, an economist pointed out that Sabah and Sarawak's heavy reliance on diesel extends beyond transport to include electricity generation, fishing operations, and other essential activities. Assoc Prof Dr Mustazar Mansur of Universiti Kebangsaan Malaysia (UKM) emphasized that diesel subsidies play a crucial role in maintaining stable prices of basic goods, as a significant portion of supplies is shipped from Peninsular Malaysia to the two states.
Mustazar elaborated that the geographical structure of Sabah and Sarawak differs from Peninsular Malaysia, and income levels are generally lower, resulting in greater dependence on diesel, including for generators among communities that require such fuel. He warned that if fuel costs rise, logistics costs will follow, ultimately pushing up consumer prices.
Mustazar also stressed the importance of ensuring subsidies are channelled accurately to those who genuinely need them and having continued grassroots engagement to better understand how subsidy policies affect daily lives. He remarked on the need to hear from people on the ground, as they are directly affected, not those at the top, highlighting the risk that policymakers may overlook realities at the lower levels.