KOTA KINABALU — Federal government spending on the diesel subsidy for Sabah and Sarawak surged to RM1.4 billion in the first four months of this year, driven by rising oil prices amid the global supply crisis, Domestic Trade and Cost of Living Minister Datuk Armizan Mohd Ali said.
In contrast, the government spent RM2 billion on diesel subsidies for the two states throughout the whole of last year.
“For the first two months of 2026, diesel subsidy expenditure for Sabah and Sarawak stood at RM103 million in January and RM106 million in February. However, the subsidy bill jumped to RM563 million in March and RM647 million in April.
“The government remains committed to providing targeted subsidies to the people and industry. As such, these subsidies must be managed carefully given their significant fiscal implications,” Bernama reported him saying after presenting the PETRONAS Fleet Card Smartpay to selected goods and public land transport companies registered under the Subsidised Diesel Control System (SKDS) here today.
Armizan said SKDS was one of several risk management mechanisms introduced to curb diesel subsidy leakages, while strengthening enforcement and monitoring through digital technology.
The minister said the government remained committed to maintaining targeted diesel subsidies as an intervention and mitigation measure to address rising living costs and the increasing prices of goods and services.
At the same time, Armizan said efforts would continue to ensure sufficient and stable fuel supplies nationwide through close cooperation with oil and gas industry players to strengthen supply chains and prevent leakages.
“At present, fuel supplies are secured, and we will ensure there are no major disruptions to petrol or diesel availability at fuel stations,” he said.
Armizan added that the targeted fuel subsidy programme would continue despite its substantial financial burden, including through the BUDI MADANI initiative, which provides eligible recipients with RON95 petrol at RM1.99 per litre for up to 200 litres a month.
He said SKDS also enables goods transport companies holding fleet cards to purchase diesel at the subsidised rate of RM2.15 per litre, while public land transport operators enjoy a subsidised rate of RM1.88 per litre. – June 15, 2026