President Ibrahim Mohamed Solih has revealed the government will soon change the policies on fuel subsidies in order to benefit the citizens most in need of the subsidies. He made the remark in a televised address to the nation on the occasion of the 57th Anniversary of Independence of the Maldives.
In his speech, President Solih said the government decided to make the changes in response to changes in the economy. He said the economic effects of the COVID-19 pandemic and the Russia-Ukraine war are visible in the Maldives. He noted that while global prices for goods and fuel had risen significantly, Maldivians had not incurred the full brunt of these increases due to government intervention. He went on to say that the government's primary responsibility is to absorb the effects of similar hardships experienced around the world while minimising any harm to its citizens.
Additionally, President Solih said the economy of the Maldives will return to pre-pandemic levels this year but there are immediate challenges to be solved in order for all Maldivians to benefit. He said the government has deemed it necessary to make policy changes to keep providing essential public services while maintaining the current economic development. He detailed that the work includes reducing recurrent state expenditure, delaying upcoming government projects, and increasing state revenue.
Regarding fuel subsidies, President Solih said that the amount spent on fuel subsidies has significantly exceeded the estimated expenditure. As such, he said that USD22 million was allocated in this year’s state budget for fuel subsidies but that the amount spent so far has reached USD58 million. He estimated that the total state funds spent on fuel subsidies this year might reach USD124 million.
Furthermore, President Solih said that the policies on fuel subsidies will be changed to reduce the cost of electricity and to provide subsidies to fishermen. He said that the country needs to remain vigilant and ready to make more policy changes to counter the economic disruptions caused by the Ukraine conflict. He highlighted that the government has already begun work to implement the necessary policy changes and expressed confidence that it will maintain economic stability in the Maldives.