The state government of Sabah is preparing to submit new proposals to the federal government to upgrade the BUDI diesel subsidy scheme, citing significant difficulties faced by residents and businesses in the region.
The move signals a growing divergence between state-level needs and federal subsidy structures in Malaysia’s energy sector.
According to Malay Mail, the Sabah administration intends to present its feedback and revised framework to Kuala Lumpur to address the strain on local consumers.
The proposal comes as the state grapples with the economic impact of current subsidy mechanisms, which have left many operators and households struggling with elevated fuel costs.
This development adds another layer to the ongoing tension between Malaysian authorities and major oil companies.
Prime Minister Anwar Ibrahim recently announced that the federal government would engage in direct discussions with major oil firms to address allegations of financial losses incurred by petrol station operators.