KOTA KINABALU: Allowing Sabah, Sarawak and Labuan to continue enjoying subsidised diesel is not unfair because the government did not say the policy would never be applied in these three regions, said Datuk Armizan Mohd Ali.
The Domestic Trade and Cost of Living Minister said claims of the Federal Government being unfair in this matter are not right.
"This is because the government had never mentioned that the targeted subsidy policy will never be applied in these three regions, but rather to be implemented in phases," he explained.
Armizan said when the government first started its subsidy distributions, they were done based on targeted subsidies, which means the policy of subsidies will still be continued via targeted distribution mechanisms.
He said the policy on subsidy is a huge and new change, therefore the implementation has to be planned meticulously and must be done in stages.
"That is why in 2024, the government started with a targeted diesel subsidy in Peninsular Malaysia. In 2025, we started with the RON95 targeted petrol subsidy nationwide and both agendas have run smoothly, and will always be fine tuned," he said.
Armizan said for this year, the plan was to review proposals to implement targeted diesel subsidies in Sabah, Sarawak and Labuan and once the proposal mechanisms have been adjusted or polished, they will be brought up for discussions with both Sabah and Sarawak.
"In principle, the diesel subsidy will continue to be implemented but it would be targeted and address risks of leakages, smuggling and abuse," he said.
He said there are existing fuel subsidy models such as BUDI95, BUDI Madani, Subsidised Diesel Control Scheme and the Subsidised Petrol Control Scheme which can be used as guidelines to finalise the best mechanism for targeted diesel subsidies in these three regions.
"Of course the unique factors such as geographical, logistics and other elements in Sabah, Sarawak and Labuan will be taken into account, as well as views from interested parties," said Armizan.
It was also important to note that targeted diesel subsidies are also applied in Peninsular Malaysia, he said, adding that the perception that it is not given there must be corrected.
He said the implementation of targeted diesel subsidies for Sabah, Sarawak and Labuan will only be considered in the next phase of execution after the 2024 and 2025 phase due to many factors.
"Among them is the high dependency of Sabahans on diesel, due to factors mentioned above and the huge price gap between these three regions and Peninsular Malaysia," Armizan said.
Following global fuel price spikes amid the conflict in West Asia, Prime Minister Datuk Seri Anwar Ibrahim had made a special announcement on Thursday on diesel and fuel prices.
He said the government would temporarily adjust the Budi95 eligibility quota from 300 litres to 200 litres per month effective April 1, 2026, but would maintain the subsidised RON95 price at RM1.99 per litre.
Diesel prices in Peninsular Malaysia were increased to RM4.72 per litre from RM3.92, while unsubsidised RON95 and diesel in Sabah, Sarawak and Labuan remain unchanged at RM3.27 and RM2.15 per litre, respectively.
