THE impact of the diesel subsidy rationalisation in Peninsular Malaysia have yet to be seen in Sabah, but many believe prices of goods transported to the state will be affected eventually.
Sabah Finance Minister Datuk Seri Masidi Manjun told The Vibes the state is now in a wait-and-see mode, knowing the move will affect transporters in West Malaysia.
But Masidi said the move also may see Sabah goods become cheaper if they were to be exported to the peninsula.
“I have not seen the whole rationalisation process, but I believe it involves logistic companies. If it does, I assume there would be some implications. But how big the impact will have yet to be seen.
“I think there isn’t a need to hit the panic button yet. Then again, there is also the possibility that goods from Sabah shipped to Port Klang would be cheaper,” he said.
Masidi said this after witnessing the anti-graft pledge taken by the staff of Sabah Electricity Sdn Bhd in Kota Kinabalu.
Malaysia cut diesel subsidies and floated retail prices at its market rate of RM3.35 per litre, up over 50% from RM2.50 per litre, starting yesterday. The move is seen as the government’s way to cut losses of around RM1 billion a month due to leakages and smuggling, which in return can help it save around RM4 billion annually.
Sabah and Sarawak have been exempted from the exercise due to their populations’ heavy reliance on diesel-powered vehicles to traverse its underdeveloped road networks.
Chartered Institute of Logistics and Transport Sabah chairman Daniel Doughty said any implications for the prices of goods in Sabah would be minimal.
He said that there are transportation variables that can affect the prices of goods, such as smuggling and other factors.
For instance, Doughty said the consumer price index of goods in Sabah did not improve even when the federal government has completely freed the cabotage policy, which allegedly caused the prices of goods to be much higher than in Sarawak and the peninsula.
“So, even if the rationalisation of diesel subsidies in the peninsula affects Sabah, it would be very minimal,” he said.
Communications Minister Fahmi Fadzil, who visited Kota Kinabalu, told the press that the fuel rationalisation exercise will likely not affect imported goods in Sabah.
He said the government has implemented the fleet card mechanism to subsidise diesel-powered vehicles, covering 23 types of cargo vehicles.
“Further to this, even if the goods here are affected, the Domestic Trade and Living Costs Ministry has set up a mechanism to ensure that would likely not happen,” he said.
Domestic Trade and Living Costs Minister Datuk Armizan Ali did not respond when contacted for comments.
Prices in Sabah are around 30% higher than in the peninsula due to the state’s heavy reliance on imports, including food items like beef and rice, as well as others such as fertilisers and poultry feed crucial to its agriculture sector. – June 11, 2024
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