Sabah’s Diesel Subsidy- Essential Support, not a Privilege

31 March 2025

KOTA KINABALU: Sabah Youth take the criticisms and issues raised by various parties regarding the implementation of diesel subsidies in Sabah and Sarawak seriously.

Alison Chan, United progressive Kinabalu Organisation (UPKO) Youth member shared that among the narratives or questions raised is the notion that this policy is an unfair privilege, as only Sabah, Sarawak, and the Federal Territory of Labuan enjoy diesel subsidies.

According to her, this narrative is not only misguided but also reflects a failure to understand the true realities of life in East Malaysia, particularly in Sabah. The diesel subsidy given to Sabah is not a privilege but a basic necessity arising from different realities.

“Sabah has a vast geographical area and a terrain that is much more challenging, with dispersed populations including in rural and remote areas, compared to states in Peninsular Malaysia. In this context, daily travel for local communities, especially those in rural and remote areas, is not only long but often involves very difficult and incomplete routes,” she said adding that many parts of Sabah still lack proper connectivity or good, reliable roads.

“Compared to Peninsular Malaysia, this results in Sabahans, particularly those in rural and remote areas, having to traverse muddy roads, rivers, and unpaved pathways to access schools, shops, and clinics for education, necessities, and healthcare.”

“For example, in early 2024, a viral video on social media showed four students in Kota Marudu, Sabah, having to walk through muddy roads for six hours to reach their school. One solution to this problem is the use of four-wheel-drive (4WD) diesel vehicles to navigate these challenging routes.”

In this situation, the use of 4WD diesel vehicles is not a luxury or choice but a necessity for Sabahans living in remote areas to continue their daily lives.

“The fact that the cost of goods in Sabah is significantly higher than in Peninsular Malaysia is not just perception but a reality faced regularly by Sabahans. One of the main reasons for the higher logistics costs is the long distances involved, coupled with poor and unsatisfactory road conditions, and the absence of a commercial rail network like the one in Peninsular Malaysia, which has an integrated logistics system such as KTM Kargo,” she stated.

Sabah relies almost entirely on land transport powered by diesel. On 28 March 2026, Daniel Doughty, Chair of the Chartered Institute of Logistics and Transport Malaysia (CILTM) Sabah, stated that Sabah operates within a fundamentally different supply chain environment, with higher fuel distribution costs.

“Moreover, most essential goods in Sabah are imported from Peninsular Malaysia via sea transport, which inevitably involves additional logistics costs. When these imported goods are sold in Sabah, their prices are higher than in Peninsular Malaysia. If these goods are further transported by land using diesel, logistics costs increase even more, making the prices far higher than those in Peninsular Malaysia,” she stressed.

Another UPKO Youth Member Chin Guan Rong agreed, stating that Sabah still faces significant development gaps compared to Peninsular Malaysia, especially in basic infrastructure such as electricity generation. Sabah’s reliance on diesel is not only limited to logistics but also involves energy and electricity supply sectors.

“According to the Sabah Energy Roadmap and Master Plan 2040 (SE-RAMP 2040), an official document produced by the Sabah Electricity Commission, in 2021, about 6.7% of Sabah’s electricity generation still depended on diesel and Medium Fuel Oil (MFO). Diesel and MFO-based power generation is mainly used in the East Coast and rural areas of Sabah,” he stated.

Although only around 6.7% of the total power generation fuel used in Sabah was from diesel in 2021, this indicates that diesel plays a crucial role in ensuring the stability of electricity supply, especially in areas without reliable grid access.

“According to the CEO of Sabah Electricity Commission (ECoS), Datuk Abdul Nasser Abdul Wahid, in a report by The Star on 19 February 2025, the Sabah government extended the operation of diesel power plants and the leasing of additional diesel generators (gensets) to meet the increasing electricity demand amid supply shortages. This situation shows that diesel is still heavily used in Sabah for power generation.”

“Without diesel subsidies, electricity bills in Sabah, borne by the people, would inevitably rise due to higher generation costs, affecting the welfare of Sabahans,” he stressed.

Therefore, the diesel subsidy provided to Sabah and Sarawak, particularly Sabah, is not a privilege but a necessary step to address the long-standing development imbalance.

“If we are truly committed to principles of justice and inclusive, comprehensive development, policies like this should be maintained, supported, and understood by all segments of society in a broader context. Beyond the numbers and policies, this is a matter of the real lives of Sabahans, who rely on every liter of diesel to survive."