Malaysia loses millions as subsidised fisher fuel flows to Philippines

The Malaysian state’s proximity to southern islands in the Philippines has made enforcement against fuel smugglers difficult

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A fisherman goes out in his boat in Semporna, Sabah, Malaysia. Photo: Ushar Daniele

Published: 7:57am, 2 Feb 2026Updated: 5:27pm, 2 Feb 2026

Subsidised fuel meant for Sabah fishermen has become a lucrative criminal cargo for smugglers who criss-cross the Sulu Sea selling it for double the price in the Philippines, costing Malaysian taxpayers millions of dollars each year.

Last year, Malaysian marine police seized around 90,000 litres (24,000 gallons) of petrol and nearly a million litres (265,000 gallons) of diesel with a value of 88 million ringgit (US$22 million) in scores of cases.

Sabah’s fleet of thousands of fishermen can buy subsidised diesel for 2.10 ringgit (53 US cents) per litre, compared with pump prices of 50 pesos (85 US cents) in the southern Philippines.

Some of Sabah’s eastern coast is within 120km (75 miles) of the Philippines’ southern islands. The narrowest gap is just 18km, around the Semporna islands where maritime boundaries intersect across the Sulu Sea, complicating patrols and pursuit across jurisdictions.

Fuel is easy to move and untraceable, and Malaysian police say even small margins can generate significant profits for smuggling gangs.

“Enforcement is complicated by the dense distribution of islands near international borders, particularly in the waters of Tawau, Semporna, Sandakan and Kudat,” Sabah’s Marine Police Force regional commander Ahmad Amri Abdul Rahman told This Week in Asia.

Malaysia loses millions as subsidised fisher fuel flows to Philippines

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}The Malaysian state’s proximity to southern islands in the Philippines has made enforcement against fuel smugglers difficult

The Malaysian state’s proximity to southern islands in the Philippines has made enforcement against fuel smugglers difficult