East Malaysia diesel subsidy review underway, says Armizan

2026-03-28 - 06:40

The diesel price is currently RM2.15 per litre in Sabah and Sarawak, less than half the Peninsular Malaysia price of RM5.52 per litre. PETALING JAYA: Domestic trade and cost of living minister Armizan Mohd Ali says the finance ministry is reviewing a proposed framework for implementing targeted diesel subsidies in Sabah, Sarawak, and Labuan. Armizan said the mechanism will be discussed with the state governments before it is implemented. He also dismissed claims that the government is being “unfair” by continuing to grant blanket diesel subsidies to Sabah, Sarawak and Labuan, stating that Putrajaya’s goal is to provide subsidies through a more targeted distribution mechanism. “Given that this is a major reform, its implementation must not only be carefully designed but also rolled out gradually,” he said in a statement. “The principle is that diesel subsidies will continue, but in a targeted manner to reduce the risk of leakages, including misuse and smuggling. “We already have subsidy delivery models such as BUDI95, the subsidised petrol control system and the subsidised diesel control system (for certain public transport and commercial goods sectors). “These mechanisms will serve as references in finalising the best approach for targeted diesel subsidies in Sabah, Sarawak and Labuan, which will take into account their unique local conditions.” The diesel price is currently RM2.15 per litre in Sabah and Sarawak, less than half the Peninsular Malaysia price of RM5.52 per litre. On Thursday, Prime Minister Anwar Ibrahim said Sabah and Sarawak will continue to receive subsidised diesel at RM2.15 per litre despite rising prices, citing the states’ logistical and geographical challenges. However, Anwar said the 300-litre monthly quota for subsidised RON95 petrol under the BUDI95 programme has been reduced to 200 litres as an interim measure to address the impact of the Middle East conflict. The price remains at RM1.99 per litre. The BUDI95 programme was introduced at the end of September to ensure that RON95 petrol subsidies benefit only eligible Malaysians, while curbing leakages to foreigners and commercial entities. Under the programme, Malaysian citizens aged 16 and above who possess valid driving licences may purchase up to 300 litres of RON95 petrol per month at the subsidised price of RM1.99 per litre.