Diesel subsidy: Sabah, Sarawak, and WP Labuan land transport vehicles urged to register under SKDS immediately

More than 29,000 vehicles have been registered under SKDS so far, as the government moves to tighten subsidy distribution and curb diesel leakages across East Malaysia.

Companies operating goods and public land transport vehicles in Sabah, Sarawak, and WP Labuan are being urged to immediately register under the Subsidised Diesel Control System (SKDS) to continue receiving diesel subsidy benefits.

The reminder was issued during the PETRONAS SmartPay Fleet Card handover ceremony held in Kepayan, Kota Kinabalu, involving several land freight transport companies that have successfully registered under SKDS and received fleet cards for their approved vehicles.

Registration applications for the implementation of diesel subsidy distribution under SKDS for the land goods transport sector were expanded to Sabah, Sarawak, and WP Labuan beginning 4 May 2026. Meanwhile, applications for the public land transport sector have been open since June 2024.

As of 14 June 2026, a total of 8,060 companies and 29,631 vehicles across the three regions have been registered under the system.

The current registration status is as follows:

• Sabah: 3,922 companies and 14,415 vehicles registered
• Sarawak: 3,869 companies and 14,447 vehicles registered
• WP Labuan: 269 companies and 769 vehicles registered

Through the SKDS mechanism, eligible companies can continue benefiting from diesel subsidies via the fleet card system. The subsidy rate is fixed at RM2.15 per litre for the goods land transport sector and RM1.88 per litre for the public land transport sector.

The government also announced that the mandatory use of SKDS fleet cards for diesel subsidy claims in both sectors will be enforced at a later date to be announced.

Companies in both sectors have been urged to register for SKDS immediately to ensure vehicles listed under the 33 eligible vehicle categories can continue receiving diesel subsidies. The government said the list of eligible vehicle types, as well as registration applications for participation in SKDS, can be accessed through the MySubsidi portal.

According to YB Datuk Armizan Mohd Ali, Minister of Domestic Trade and Cost of Living, the expansion of SKDS is part of efforts to address diesel subsidy leakages through a digital monitoring and enforcement mechanism.

The use of fleet cards under the system is intended to ensure subsidies are fully utilised by targeted groups, while helping to curb leakages linked to smuggling, misappropriation, and abuse involving foreigners and illegal immigrants.

The minister also highlighted the sharp rise in diesel subsidy costs spent by the government in Sabah and Sarawak amid ongoing global energy market pressures and the prolonged West Asian conflict.

In 2025 alone, the government spent RM2bn annually on diesel subsidies for both regions.

Before the conflict escalated, diesel subsidy spending in 2026 stood at RM103mn in January and RM106mn in February. However, following the outbreak of the conflict on 28 February 2026, subsidy costs surged to RM563mn in March and RM647mn in April alone.

However, after the conflict began on 28 February 2026, subsidy costs surged significantly, reaching RM563mn in March and RM647mn in April. In total, diesel subsidies for Sabah and Sarawak totalled RM1.4bn in the first four months of 2026.

To that effect, YB Datuk Armizan said that such intervention and mitigation measures will continue, noting that targeted subsidy distribution must continue to be implemented as a mechanism to manage leakage risks, alongside efforts to strengthen enforcement agility.

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Lead image / Ministry of Domestic Trade and Cost of Living