Government Retains Diesel Subsidy in Sabah and Sarawak to Mitigate Rising Costs

Title: Government Prolongs Diesel Subsidy in Sabah and Sarawak to Alleviate Cost Strains

KUALA LUMPUR, June 24 (Bernama) – The federal government declared it will continue diesel subsidies for Sabah and Sarawak to cushion the rise in operational expenses across key sectors in East Malaysia.

Under this extended scheme, qualifying entities in both states—including logistics, manufacturing, fisheries, and agriculture—will keep accessing diesel at RM2.05 per litre, far below the about RM3.10 retail rate. First rolled out earlier this year, the subsidy will remain in effect until December 31, 2023.

Finance Minister Datuk Seri Anwar Ibrahim explained that the subsidy is part of a wider plan to curb inflationary trends and back industries sensitive to fuel price shifts. “Maintaining this subsidy for Sabah and Sarawak is crucial to keep transport and production costs in check for our East Malaysian partners,” he stated.

Since its launch, the program has helped buffer local businesses against sharp fuel price surges, with the government allocating roughly RM4.6 billion to the initiative last year. The minister noted that regular assessments will be made to evaluate its impact, with adjustments possible based on global oil market changes.

Industry leaders from both states have applauded the extension. Sabah’s Chamber of Commerce head highlighted that the subsidy’s continuation has averted abrupt price hikes for goods, aiding SMEs to stay competitive. Likewise, Sarawak’s fishing and plantation communities expressed relief, saying the relief is vital for sustaining incomes in distant coastal and rural areas.

The diesel subsidy extension is part of the government’s economic stimulus package measures to help control living costs, including cash support for low-income households and targeted aid for food producers. Officials signaled further assistance programs will be unveiled in the coming months to protect Malaysians from worldwide economic headwinds.

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