Subsidized fuel meant for Malaysian fishermen in Sabah is being smuggled across the Sulu Sea and resold in southern Philippines at nearly double the price, according to a report. Malaysian marine police seized about 90,000 liters of petrol and nearly one million liters of diesel last year. The price gap between Sabah and Mindanao creates strong incentives for smuggling.
Subsidized diesel bought by fishermen in Sabah for 2.10 ringgit (about 53 US cents) per liter is driving smuggling to southern Philippines, where pump prices reach around 50 pesos (about 85 US cents) per liter, a South China Morning Post report states. Last year, Malaysian marine police seized about 90,000 liters of petrol and nearly one million liters of diesel in multiple cases, valued at 88 million ringgit ($22 million). Authorities indicated much of the fuel was headed for illicit markets, including the Philippines.
Parts of Sabah's eastern coastline are within 120 kilometers of the Philippines' southern islands, with the narrowest maritime gap about 18 kilometers near the Semporna islands. Overlapping maritime boundaries across the Sulu Sea complicate patrols and enforcement, Malaysian authorities noted. Fuel is easy to transport and hard to trace, allowing even small margins to yield significant profits for smuggling networks.
"Enforcement is complicated by the dense distribution of islands near international borders," Sabah Marine Police Force regional commander Ahmad Amri Abdul Rahman told SCMP. Malaysia's fuel subsidies for fishermen were introduced in 2006 to support livelihoods, but officials acknowledged they can be exploited. Agriculture and Food Security Minister Mohamad Sabu said fishermen could purchase their full fuel quotas but sell unused portions on the black market.
Authorities also highlighted fuel storage sites on small islands near maritime borders, which hinder monitoring due to unclear regulations on storage limits. These factors exacerbate challenges in curbing smuggling in the region.