Government to Stabilise Fuel Prices Using STO Profits Amid Middle East Crisis
STO profits to help curb rising fuel costs, says government
The government has announced plans to stabilise fuel prices in the Maldives by using projected profits from the State Trading Organisation (STO) to mitigate the impact of rising international fuel costs.
The announcement was made during a press conference at the President’s Office by the special cabinet committee formed by President Dr Mohamed Muizzu to address challenges Maldivians may face due to the ongoing conflict in the Middle East.
Finance Minister Moosa Zameer stated that the government’s priority is to ensure uninterrupted access to essential services, including fuel, staple foods, medicine, and funds for students studying abroad. A technical committee involving the central bank (MMA), the Ministry of Finance, and the Maldives Inland Revenue Authority (MIRA) has been established to monitor and manage potential shocks to state revenue caused by the war.
The minister highlighted the potential economic impact of the conflict, noting that many tourists travel to the Maldives via Middle Eastern countries. While the country has secured sufficient oil and gas supplies, global fuel prices have risen significantly.
To reduce the burden on the public, the government will supplement existing subsidies for fuel imports with a portion of STO’s projected profits. This cross-subsidisation is intended to absorb additional costs without passing them onto consumers or causing difficulties for businesses.
STO currently operates two vessels capable of importing the required fuel for the Maldives. A new 24,500 metric tonne vessel, purchased in January, ensures a continuous fuel supply, while an additional 22,000 metric tonne vessel will begin a new shipment tonight. One of these vessels is expected to arrive in the Maldives within the next four to five days.
The government emphasised that fuel prices in the Maldives are carefully calculated based on average costs over several days and are not adjusted frequently, unlike in many other countries. This approach, combined with the cross-subsidisation plan, is aimed at maintaining price stability despite global market fluctuations.
