KOTA KINABALU: Government diesel subsidies for Sabah and Sarawak have increased five to six fold following the global energy crisis triggered by the Middle East conflict on Feb 28, Domestic Trade and Cost of Living Minister Datuk Armizan Mohd Ali (pic) said.
“In January and February 2026, diesel subsidies borne by the government for Sabah and Sarawak amounted to RM103mil and RM106mil, respectively.
“But after the conflict began, subsidies rose to RM563mil in March and RM647mil in April,” he said.
Overall, Armizan said diesel subsidies for Sabah and Sarawak between January and April 2026 reached RM1.4bil as compared to about RM2bil on diesel subsidies in Sabah and Sarawak for the whole of 2025.
Armizan gave the assurance that the government will continue to bear the rising cost of diesel subsidies as long as global oil prices remain high and the energy crisis persists.
He urged goods and land public transport vehicles in Sabah, Sarawak and the Federal Territory of Labuan that qualify for diesel subsidies to register immediately under the Subsidised Diesel Control System (SKDS) to ensure continued access to government assistance.
Speaking to reporters at the handover of PETRONAS SmartPay fleet cards to several goods transport companies approved to receive SKDS in Kepayan, he said using SKDS with fleet cards will be mandatory for obtaining subsidies for the land transport sector on a date to be announced later.
He called on all companies with vehicles in the 33 eligible categories not to delay their applications to avoid disruption in receiving subsidised diesel.
“Through SKDS, eligible companies will receive diesel subsidies via the fleet card mechanism at RM2.15 per litre for the goods transport sector and RM1.88 per litre for the public transport sector,” he said.
Registration for SKDS in the goods transport sector in Sabah, Sarawak and Labuan opened on May 4, while the public transport sector has enjoyed targeted subsidies since June 2024.
As of June 14, a total of 8,060 companies involving 29,631 vehicles have registered under SKDS across the three regions.
He said Sabah recorded 3,922 companies with 14,415 vehicles, Sarawak with 3,869 companies and 14,447 vehicles, and Labuan with 269 companies and 769 vehicles.
Armizan said the expansion of SKDS is part of the government’s effort to strengthen digital monitoring and enforcement of diesel subsidies to ensure aid reaches the intended groups and to reduce leakages.
He noted that fleet card usage enables more effective monitoring of subsidised diesel consumption, curbing smuggling, misappropriation and abuse of subsidies by irresponsible parties including foreigners and undocumented migrants.
He said the government was committed to channelling targeted diesel subsidies to the people and industries to help ease living costs and stabilise prices of goods and services.
“At the same time, targeted subsidies are crucial to reduce leakage risks and also strengthen enforcement effectiveness,” he added.
The oil companies involved in SKDS in Sabah are PETRONAS, Shell and Petron.
