Targeted diesel subsidy plan sparks concern in Sabah over rural access

KOTA KINABALU, June 29 — As Putrajaya prepares to roll out its targeted diesel subsidy scheme in just a few days, concerns are mounting that a policy designed to curb fuel leakages may inadvertently leave behind many ordinary Sabahans who depend on diesel-powered vehicles for their daily lives.

Unlike much of Peninsular Malaysia, diesel is more than just commercial fuel in Sabah. 

It powers the four-wheel drives that navigate rough rural roads, ferries farmers to distant markets, transports tourists to interior attractions and carries teachers to schools scattered across the state’s vast interior.

While the federal government says the new Budi Diesel programme will ensure subsidies reach only eligible Malaysians through MyKad verification, teachers, tourism operators, politicians and community leaders argue that Sabah’s realities make a uniform national policy difficult to implement.

One of the biggest concerns centres on the monthly subsidised quota of 200 litres, which the government says will be sufficient for most motorists. 

Eligible owners of pickup trucks and jeeps can apply for an additional 100 litres but many say even 300 litres may not be enough for many Sabahans who routinely travel hundreds of kilometres every week.

Concerns across industries

Sabah Teachers’ Union (KGKS) president Murkam Hussien said many teachers stationed in rural schools rely on diesel-powered four-wheel drives simply because road conditions leave them with few alternatives.

“KGKS members believe that limiting the diesel subsidy quota will affect teachers who commute daily to work, particularly in rural areas.

 “The 200-litre monthly quota is seen as insufficient to meet their actual needs,” he said, urging Putrajaya to review the allocation.

Keningau Tourism and Culture Association chairman Rafie Robert said residents in the interior districts such as Keningau, Nabawan, Sook and Tenom regularly travel hundreds of kilometres for work, healthcare, education and business.

“A 200-litre monthly quota is simply not enough to meet the actual needs of people who depend on diesel vehicles as their primary mode of transport,” he said.

He warned that higher diesel costs would eventually raise transport expenses for rural tourism operators, farmers, smallholders and entrepreneurs, who already face higher logistics costs than their counterparts elsewhere in Malaysia, and the discrepancies would eventually be transferred onto consumers as well.

Political leaders from both divides have also questioned another feature of the scheme — restricting subsidised diesel to registered vehicle owners.

Warisan assemblyman Tham Yun Fook said the policy does not reflect the reality on the ground in Sabah, where vehicles are commonly shared among family members or registered under relatives, businesses or other arrangements.

He said that many deserving users may not be able to access the subsidy just by virtue of their MyKad.

“A vehicle may be registered under the name of a child working in another town while the parents are the actual users. These are not people abusing the system — they are simply relying on diesel vehicles to go about their daily lives,” he said.

Many Sabahans have children or spouses working in Peninsular Malaysia who purchase vehicles under their own names for use by parents and other family members back home in rural Sabah. 

The question is whether these family members would be excluded from receiving diesel subsidies simply because the vehicle is not registered in their name.

After the subsidy was announced, Sabahans on social media voiced their worries, telling of their daily commute from districts such as Kota Belud or Papar to the state capital for work. 

They rely on larger diesel-powered vehicles to transport goods, people and equipment everyday over Sabah’s porous roads.

The socio-economic circumstances also mean that not only are many vehicles registered under parents, childrens’ employers or other family members, many also use vehicles under informal “sambung loan” arrangements.

“For many ordinary Sabahans, this is not a matter of choice. It is simply their reality.

“Many Sabahans rely on diesel vehicles not because we want to, but because we have little choice. Distances are far. Public transportation is limited. Many roads are still not in the condition we hope they would be,” said Sabahan entrepreneur Amos Thien.

Thien argued that Sabah deserved greater flexibility under the targeted subsidy programme given its dependence on diesel vehicles and status as an oil-producing state.

The federal government has maintained that the reforms are necessary to plug widespread leakages and fuel smuggling and also ensure stable domestic supply of diesel.

Second Finance Minister Datuk Seri Amir Hamzah Azizan said subsidised diesel sold through MyKad verification would help ensure only eligible Malaysians receive government assistance while curbing abuse that previously occurred under the blanket subsidy system.

He said the government expects the reforms to reduce diesel leakages by up to one billion litres annually, with savings allowing subsidised diesel prices in Sabah, Sarawak and Labuan to fall from RM2.15 to RM2.10 per litre.

During a media briefing here recently, Amir Hamzah also expressed confidence that MyKad verification will work in rural Sabah, citing the success of the Sumbangan Asas Rahmah (SARA) programme had a near 100 per cent redemption rate.

Nevertheless, Sabahans say the issue is not about opposing subsidy reforms, but ensuring the policy reflects the state’s unique geography and transport realities.