By Olivia Miwil
KOTA KINABALU: Rural communities must remain central in policy considerations, including economic policies such as diesel pricing, said Universiti Teknologi Sabah senior lecturer Dr Jain Yassin.
Diesel is widely used not only for transport but also for fishing boats, generators, water pumps and small-scale agricultural activities.
"In rural districts, where transport costs are already high, any increase in fuel costs can translate into higher prices," he said.
"Therefore, the additional diesel quota under Budi Diesel will help cushion the inflationary impact in Sabah," the adviser to the All-Party Parliamentary Group Malaysia-SDG (Sabah region) told the New Straits Times.
However, structural issues linked to Sabah's heavy reliance on diesel, driven by geography and infrastructure gaps, could create hidden economic costs in the long term.
Transport and logistics, he said, are the most affected sector under the subsidised diesel quota system in Sabah, as they form the backbone connecting economic activities across the state.
Agriculture, fisheries and smallholders are also highly dependent on transporting goods from rural farms to markets using four-wheel-drive vehicles.
Jain said that in the short term, businesses exceeding their allocated diesel quotas may face higher operating costs, which could eventually be passed on to consumers through higher prices of goods and services.
"If not properly managed, it could constrain rural economic activities in the long run.
"For instance, less flexible transport scheduling and reduced household mobility, particularly in accessing healthcare, education and markets."
He added that policy interventions should not only focus on subsidies but also on improving long-term resilience.
"In the long run, for fiscal sustainability, policy intervention to reduce reliance on diesel in rural areas is needed, alongside efforts to expedite road upgrading and improve connectivity to markets," he said.
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