The Federal government, through the Ministry of Finance, is currently reviewing a proposed framework for targeted diesel subsidies in Sabah, Sarawak and Labuan.
KOTA KINABALU: Claims that the Federal Government is being unfair by continuing blanket diesel subsidies in Sabah, Sarawak and Labuan are misguided, said Domestic Trade and Cost of Living Minister Datuk Armizan Mohd Ali.
He said the government has never taken the position that targeted diesel subsidies would not be implemented in these three regions, but rather that the rollout would be carried out in stages.
“The government’s policy is clear: to reform subsidy distribution through targeted measures so that assistance is more effective and reaches the intended groups.
“As this is a major reform, its implementation must be carefully planned and carried out in phases,” he told reporters at the state-level Hari Raya Aidilfitri celebration at the Sabah International Convention Centre here today.
The Federal government, through the Ministry of Finance, is currently reviewing a proposed framework for targeted diesel subsidies in Sabah, Sarawak and Labuan.
Once refined, it will be brought forward for discussions with the Sabah and Sarawak state governments before implementation.
Armizan said the government is also drawing on existing models such as BUDI95, BUDI MADANI, the Subsidised Diesel Control Scheme (SKDS), and the Subsidised Petrol Control Scheme (SKPS) in designing the most effective mechanism.
He added that the perception that diesel subsidies are no longer provided in Peninsular Malaysia is also misplaced.
“Diesel subsidies continue to be channelled in a targeted manner through SKDS and BUDI MADANI to the land and goods transport sectors, as well as to specific eligible groups,” he said.
Armizan elaborated that implementation in Sabah, Sarawak, and Labuan requires more careful assessment due to their high reliance on diesel, as well as geographical challenges and higher logistics costs.
“The cost of transporting goods by sea from Peninsular Malaysia to Sabah and Sarawak is higher than most major trade routes in the region, including those involving China and India. This contributes to significant price disparities, driven by logistics costs and dependence on imports,” he said.
