The Malaysian government has been providing subsidy for various products. Among the subsidy given by the government, the most significant amount goes to energy subsidy. This has lead to over consumption of energy source and high national deficit which eventually may lead the country to bankruptcy. However, subsidy cannot be eliminated as long as there is government and the existence of democracy political system. Therefore, a mechanism to distribute energy subsidy to the deserving subsidy beneficiaries should be implemented to avoid distributing subsidy in a blanket basis. This book looks into the impact of subsidy on energy demand and the efficient way of distributing energy subsidy in Sabah and Sarawak.