Sabah Backbencher Calls for Higher Diesel Quota in Rural Areas

Sabah State Legislative Assembly member for Kuamut, Datuk Masiung Banah, has called for the monthly BUDI Diesel quota for rural areas in the state to be increased from 200 to 500 litres, citing the vast distances, challenging terrain, and unique economic realities faced by residents in the interior.

Speaking during the winding-up debate of the Supplementary Supply Bill 2026 at the state assembly sitting, Masiung, who chairs the Sabah Backbenchers Club, highlighted that the current 200-litre allocation is grossly insufficient for his constituency. He pointed out that a round trip from Kuamut to Kota Kinabalu takes six to seven hours, consuming approximately 200 litres of diesel, essentially using up the entire monthly quota in a single journey.

"The diesel subsidy, which has been capped at 200 litres, is not enough for my constituency. A round trip from Kuamut to Kota Kinabalu takes 6-7 hours. I don't have the exact distance in kilometres, but what is certain is that 200 litres would already be used up on a single return journey between Kuamut and Kota Kinabalu. That's just one round trip, yet we are only allocated 200 litres for an entire month," he said.

Masiung acknowledged the federal government's challenges in restructuring fuel subsidies for the rakyat but stressed that implementation should account for the differing circumstances between urban and rural areas, particularly regarding travel distance, terrain, and area size. He noted that Kuamut itself is larger than the state of Kedah and comparable in size to Johor, underscoring the vastness of the region that his constituents must navigate.

The BUDI Diesel Programme

The BUDI Diesel programme, implemented nationwide from July 1, provides eligible private diesel vehicle owners with a basic quota of 200 litres per month at RM2.10 per litre, a significant discount from the market price of RM3.97 per litre. Owners of eligible SUVs and pickup trucks may apply for an additional 100 litres under the Budi Madani scheme. However, Masiung argued that even this enhanced allocation remains insufficient for rural Sabah, where distances are vast and public transportation infrastructure is limited.

Under the subsidy programme, eligible recipients include individual owners of diesel vehicles used for private purposes, as well as owners of agricultural smallholdings and haulage vehicles. The government has implemented this targeted approach as part of its broader effort to rationalise subsidies while ensuring that those who genuinely need assistance continue to receive support.

A Question of Geography and Accessibility

Sabah's unique geography presents challenges that are not fully accounted for in the current subsidy framework. Unlike Peninsular Malaysia, where a three-hour drive can cross several states, a three-hour journey in Sabah may not even reach the next district. This reality was recently highlighted by Agriculture, Fisheries and Food Industry Minister Datuk Jamawi Jaafar, who noted that Sabah's fuel consumption patterns differ significantly from those in the peninsula due to the state's size and the dispersal of its population centres.

"We are not the same as Peninsular Malaysia. Over there, a three-hour drive can take you across several states. In Sabah, you can drive for three hours and still not even reach the next district," Jamawi said.

This geographic reality is compounded by the limited availability of public transportation in rural areas, forcing many residents to rely heavily on private vehicles for essential travel, including accessing healthcare, education, and markets. Additionally, many rural communities rely on boats for transportation and diesel generators for electricity, further increasing their fuel consumption.

Broader Concerns on Subsidy Accessibility

Masiung also expressed concern that many rural residents, including smallholder farmers and fishermen, are unable to access the subsidy because vehicles are registered under company names or purchased through hire-purchase arrangements. Those living in areas without proper roads or electricity supply are forced to purchase diesel at market price RM3.97 per litre, placing an undue financial burden on already vulnerable communities.

This issue is particularly acute for farmers who operate agricultural machinery and smallholders who need to transport their produce to markets. Without adequate subsidy access, these essential economic activities become less viable, threatening the livelihoods of rural communities and undermining efforts to develop Sabah's agricultural sector.

Call for Regional Differentiation

While Masiung acknowledged the federal government's challenges in restructuring fuel subsidies, he urged that the implementation be tailored to Sabah's specific circumstances. He noted that the state government has already established a monitoring committee for diesel and petrol subsidies, and he urged the secretariat to consider the matter carefully.

"I appeal to the federal government; I understand that the state government has already established a monitoring committee for diesel and petrol subsidies. I urge the secretariat formed by the state government to consider this matter. I believe rural areas should have their quota increased from 200 to 500 litres," he said.

His call aligns with growing sentiment among Sabah leaders that national policies must account for the state's unique circumstances. The federal government has indicated openness to refining the subsidy scheme, with Minister in the Prime Minister's Department (Sabah and Sarawak) Datuk Mustapha Sakmud stating that ongoing discussions with stakeholders would continue to ensure smooth implementation without affecting the quality of life of rural communities.

The call to increase the BUDI Diesel quota from 200 to 500 litres in Sabah's rural areas highlights a fundamental challenge in implementing national policies across diverse geographic and economic landscapes. While the federal government's subsidy rationalisation efforts are understandable, a one-size-fits-all approach may inadvertently disadvantage communities in remote areas who depend heavily on diesel for their daily lives and livelihoods.

As discussions continue between federal and state authorities, the hope is that a balanced solution can be found—one that addresses the genuine needs of rural Sabahans while respecting the broader fiscal objectives of subsidy reform. For now, the voices of leaders like Masiung Banah serve as an important reminder that policy implementation must be sensitive to local realities.