The government will intensify enforcement at border areas and smuggling hotspots nationwide, particularly in Sabah and Sarawak, to curb fuel leakages
KOTA KINABALU: Strengthening enforcement at border areas and hotspots nationwide, particularly in Sabah and Sarawak, is a key focus of the inter-agency steering committee to curb leakages and smuggling (JTPAP) of controlled goods, said Domestic Trade and Cost of Living Minister Datuk Armizan Mohd Ali.
He said the strengthened monitoring of border areas and hotspots in Sabah and Sarawak takes into account the bulk diesel subsidy, as the wide disparity between subsidised, pump, and market prices heightens the risk of leakages and smuggling.
“The activation of this committee follows an increased risk of leakages and smuggling of controlled goods, especially diesel and petrol, arising from the West Asia conflict, which has pushed up global oil prices. The risk in Malaysia exists because retail diesel and petrol prices at pumps remain far below market rates, despite adjustments made for March 12-18.
“Moreover, the risk of leakages and smuggling is particularly high in Sabah and Sarawak because the bulk diesel subsidy continues. In these states, diesel is sold at RM2.15 per litre, compared with RM3.92 per litre in Peninsular Malaysia, while the current Automatic Pricing Mechanism (APM) market price is RM4.30 per litre.
“This means people in Sabah and Sarawak are buying diesel at less than half its actual cost,” he told a press conference at the Sentuhan Kasih, Jualan Rahmah MADANI and consumer advocacy programme here today.
The committee, chaired by Deputy Prime Minister Datuk Seri Fadillah Yusof, was reactivated on Wednesday to develop a more integrated approach to curbing smuggling risks following the West Asia conflict.
Armizan said the cost of the government’s diesel subsidy could rise significantly if domestic fuel diversion and cross-border smuggling are not adequately addressed.
“The financial impact of the existing bulk diesel subsidy in Sabah and Sarawak is already substantial. In 2025, the government’s subsidy for these two states reached RM2 billion, namely RM924 million for Sabah and RM1.08 billion for Sarawak. Based on the same usage levels and current market prices, the subsidy liability could rise to RM4.6 billion in 2026,” he added.
In view of uncertainties from the West Asia conflict and global oil prices, he said one of the Cabinet’s immediate interventions is to strengthen enforcement across all relevant agencies.
“Enforcement operations will be carried out under the Control of Supplies Act 1961 (Act 122) and the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (Act 613),” he said.
