SANDAKAN – Sabah is far from ready to implement the proposed targeted diesel subsidy, citing its already elevated logistics costs compared to West Malaysia.
Sabah Universiti Teknologi Mara (UiTM) economist and senior lecturer Jain Yassin pointed out that despite Borneo states being excluded from the recently announced targeted diesel subsidy, Sabah is still poised to endure economic repercussions from its implementation.
“The direct impact (on Sabah) will be the increasing costs of manufacture and logistics. Since many goods in Sabah are shipped from the peninsula, it will likely lead to higher prices for these goods in Sabah.
“Sabah is nowhere near ready to implement this programme. If the government intends to proceed, immediate intervention is crucial,” he told Scoop.
Among the intervention measures is logistics optimisation, which involves improving supply chain operations for faster route and load management, he said.
“If the (government) can reduce the cost of logistics, it will reduce the economic impact on Sabah if the targeted diesel subsidy is implemented in the state,” he said.
Jain also said that the demand for four-wheel-drive vehicles in Sabah is high due to its topography, geographical structures, and road conditions.
Thus, the government must improve the road infrastructure in Sabah before imposing the programme on the state.
“This includes public transportation because Sabah has yet to have systematic and wider coverage for public transportation,” he said.
He added that Sabah should have economic diversification to reduce its dependency on the diesel industry. – May 26, 2024.