Concern over Diesel subsidy

suppadmin | June 23, 2026

MBKS Councillor Eric Tay Tze Kok has voiced concern over the Federal Government’s decision to implement a nationwide targeted diesel subsidy mechanism beginning July 1, which will place Sabah and Sarawak under the same subsidy framework as Peninsular Malaysia.

While acknowledging the Government’s efforts to ensure subsidies reach those who genuinely need them and to curb leakages and smuggling activities, Tay stressed that any subsidy reform must take into account Sarawak’s unique geographical and transportation realities.

He noted that although the announced reduction in diesel prices from RM2.15 to RM2.10 per litre may appear beneficial, many Sarawakians are more concerned about the proposed monthly subsidy quota system, under which diesel and RON95 subsidies are reportedly combined into a single allocation of 200 litres.

“Many people focus on the five-sen reduction in diesel prices, but the real concern is whether a shared 200-litre quota will be sufficient to meet the daily needs of Sarawakians,” he said.

Tay explained that Sarawak’s vast geographical landscape and longer travel distances make its situation significantly different from that of Peninsular Malaysia.
“In Sarawak, travelling between districts often involves hours on the road. Whether for work, business, official duties, or simply accessing essential services, long-distance travel is a normal part of daily life.”

According to Tay, rural communities, farmers, small business owners, transport operators, and those who regularly travel between towns and districts depend heavily on diesel-powered vehicles for both transportation and their livelihoods.

He warned that if diesel and RON95 are required to share a combined monthly quota, households that own both diesel and petrol vehicles could face additional financial burdens.
“The concern for many families is whether the quota will be exhausted well before the end of the month. Once that happens, they will have no choice but to purchase fuel at market prices.”

Tay pointed out that many diesel vehicle owners in Sarawak already consume significantly more than 200 litres per month due to work and travel requirements. As a result, the savings gained from a five-sen reduction could easily be offset by higher fuel expenses once the subsidised quota is depleted.

While supporting efforts to combat smuggling, prevent subsidy leakages, and ensure responsible use of public funds, Tay stressed that policy implementation should be adapted to local conditions rather than applying a one-size-fits-all approach nationwide.

He proposed either a higher subsidy quota or a more flexible mechanism for East Malaysia to ensure that subsidy reforms do not unintentionally burden those who genuinely depend on diesel for their daily lives and livelihoods.

“Sarawakians support reform, but reform must not overlook local realities. We support targeted subsidies, but targeted subsidies should also recognise the unique needs of different regions.”