Malaysia Maintains RM2.15 Diesel Price in Sabah, Sarawak Amid Regional Dependency

The Malaysian government has maintained the diesel price at RM2.15 per litre in Sabah, Sarawak, and Labuan due to these regions’ heavy reliance on diesel for electricity, transportation, and fishing, according to the Ministry of Finance as reported by Malay Mail. These areas, which cover about 60% more land than Peninsular Malaysia, face challenging terrain and limited road access, increasing dependence on diesel-powered watercraft and heavy vehicles. The ministry noted diesel consumption in the region totals roughly two billion liters.

To reduce diesel reliance, Malaysia plans to increase the biodiesel blend from B10 to B15, initially raising it to B12 within the next one to one-and-a-half months, using existing infrastructure. The move, outlined by Deputy Minister Akmal Nasrullah and confirmed by the Finance Ministry, is expected to boost biodiesel use by up to 50% without disrupting food palm oil supplies. Infrastructure to support B20 biodiesel is also available in parts of the country, with further assessments underway.

The government is intensifying efforts to combat diesel smuggling by deploying police at over 150 petrol stations considered high risk, Prime Minister Anwar Ibrahim has stated. Authorities are reviewing the current diesel subsidy mechanism, considering adopting a system similar to the BUDI95 petrol subsidy to improve targeting and reduce leakage. Special attention is being paid to commercial users such as fishermen to ensure that subsidies reach intended beneficiaries.

In addition to these measures, the government has increased financial aid for rice farmers and diesel cash support, with payouts scheduled for April 21 to help mitigate ongoing fuel supply disruptions and price pressures. Anwar Ibrahim indicated that the government will continue monitoring fuel prices and reviewing policies to adapt to evolving domestic and international conditions.

Looking ahead, observers will be watching the implementation of the higher biodiesel blend and the restructured subsidy system, as these steps are critical for reducing regional fuel dependence and curbing illegal diesel smuggling. The effectiveness of these initiatives will also influence efforts to stabilize energy costs and support vulnerable communities reliant on diesel.