Kuching Chinese General Chamber of Commerce urges flexible fuel subsidy policy to protect agriculture

KUCHING (March 27): Putrajaya has been urged to avoid a one-size-fits-all approach in implementing fuel subsidy rationalisation, with Sarawak’s unique geography and industrial structure taken into account.

Kuching Chinese General Chamber of Commerce and Industry agriculture director Loh Siaw Kuei said the policy, while aimed at curbing abuse and smuggling, is already impacting agricultural operations in the state.

“While the measure is well-intentional, it has had tangible impacts on Sarawak’s agricultural operations,” he said in a statement.

He was responding to Prime Minister Datuk Seri Anwar Ibrahim’s announcement that Sarawak and Sabah will continue to enjoy subsidised diesel at RM2.15 per litre under a phased rationalisation policy beginning next month.

Loh noted that Sarawak’s agriculture sector is characterised by vast land areas, sparse population, dispersed production sites and long transport distances, with many farms located in suburban and remote areas.

He said the sector is heavily dependent on diesel, both for transportation and machinery such as water pumps, generators and farm equipment.

“The new policy, which caps refuelling between 50 and 150 litres depending on vehicle type, is expected to significantly affect transport efficiency in Sarawak.

“Agricultural operations require continuity and timeliness, especially for fresh produce such as vegetables, fruits and seafood. Any transport restrictions will directly impact product freshness and market supply stability,” he said.

Although the latest rationalisation does not involve a price increase, Loh said it raises time costs and logistical burdens, particularly for small and medium-scale farmers and agro-based businesses.

He warned that fuel constraints could disrupt daily production schedules and create ripple effects across the supply chain, leading to higher transportation costs, price fluctuations and ultimately increased costs for consumers.

Loh called on the federal government to implement a more flexible approach, including dedicated arrangements for agricultural transport to ensure smooth operations and food supply security.

“Sarawak agriculture is not just a production issue — it is also a transport issue.

“The government should engage with the agricultural sector and explore flexible subsidies or dedicated mechanisms to prevent disruption to production and market supply,” he said.

He cautioned that without such measures, farmers’ operating costs could rise, potentially affecting price stability and local food supply.