KOTA KINABALU, March 27 (Bernama) -- 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, said that although the government is undertaking a temporary adjustment of 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.
“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 said in a statement today.
He said 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 said it is crucial for all parties, including consumers, industry players and enforcement agencies, to play their roles in ensuring the policy is implemented effectively and benefits the public as a whole.
He also expressed appreciation to Prime Minister Datuk Seri Anwar Ibrahim for addressing the needs of Sabah and Sarawak in the policy’s implementation.
Yesterday, 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 said 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 said 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) said 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.
“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.
“If fuel costs rise, logistics costs will follow, ultimately pushing up consumer prices,” he said when contacted today.
Mustazar added that current government controls on diesel supply quantities are among the measures to encourage more prudent usage, particularly amid global supply uncertainties.
As a next step, he 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.
“We need to hear from the people on the ground, as they are the ones directly affected, not those at the top. There is always a risk that policymakers may overlook realities at the lower levels,” he said.
“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 said in a statement today.
He said 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 said it is crucial for all parties, including consumers, industry players and enforcement agencies, to play their roles in ensuring the policy is implemented effectively and benefits the public as a whole.
He also expressed appreciation to Prime Minister Datuk Seri Anwar Ibrahim for addressing the needs of Sabah and Sarawak in the policy’s implementation.
Yesterday, 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 said 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 said 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) said 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.
“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.
“If fuel costs rise, logistics costs will follow, ultimately pushing up consumer prices,” he said when contacted today.
Mustazar added that current government controls on diesel supply quantities are among the measures to encourage more prudent usage, particularly amid global supply uncertainties.
As a next step, he 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.
“We need to hear from the people on the ground, as they are the ones directly affected, not those at the top. There is always a risk that policymakers may overlook realities at the lower levels,” he said.