Gov’t continues diesel subsidy for Sabah, Sarawak amid global oil price pressures

KOTA KINABALU (March 15): The federal government will continue maintaining fuel subsidies for Sabah and Sarawak despite rising global oil prices driven by geopolitical tensions, said Prime Minister Datuk Seri Anwar Ibrahim.

He said the government has allocated RM4.6 billion in diesel subsidies for Sabah and Sarawak in 2026, with RM2.2 billion allocated for Sabah and the remainder for Sarawak.

Anwar said the decision reflects the government’s commitment to easing the cost-of-living burden faced by the people, particularly in East Malaysia.

“In 2025, the diesel subsidy for Sabah and Sarawak amounted to about RM2 billion, with RM1 billion each for Sabah and Sarawak.

“However, with global developments, including conflicts that have pushed oil prices higher, the government’s subsidy commitment has increased significantly,” he said.

He said the subsidy ensures that diesel prices in Sabah and Sarawak remain unchanged despite rising global fuel prices.

Speaking when launching the National Consumer Day 2026 at Suria Sabah here yesterday, Anwar said the government is currently selling diesel at RM2.15 per litre, although its actual cost is estimated to be about RM4.30 per litre.

“This subsidy is provided by the federal government to ease the people’s burden and is part of our responsibility to ensure the people’s welfare.

“Certain people are saying that this PMX does not care about the fate of the Sabah people. That is not true,” he said.
Anwar also noted that the government spends about RM2 billion every month to stabilise the price of RON95 petrol, which remains at RM1.99 per litre.

He said global geopolitical developments, including conflicts in the Middle East, could disrupt critical shipping routes such as the Strait of Hormuz, potentially affecting global supply chains.

“When conflicts occur, important routes may be disrupted. Ships carrying Malaysian goods and those transporting imports could face higher risks, which will increase insurance and transportation costs,” he said.

He added that global oil prices have risen from US$70 per barrel previously to more than US$103 per barrel, and the increase could push up the cost of imported goods.

“This means when oil prices rise, transportation costs will also increase, and ultimately the price of goods will also rise.

“Imported items transported by sea, including food products, may become more expensice,” he said.

Nevertheless, Anwar said Malaysia continues to maintain among the lowest fuel prices in the region, noting that only Brunei currently records slightly cheaper fuel prices.

“For the past few months, we have managed to maintain this position. Our fuel prices remain among the lowest in the world,” he said.

He added that the government will continue monitoring global developments while ensuring fuel price stability to protect consumers and the national economy.