In a measure to mitigate the difficulties that may arise in importing fuel to the Maldives, the government has decided to stabilize fuel prices using the projected profits the state receives through STO (State Trading Organization).
During a press conference held this evening at the President's Office by the special cabinet committee established by President Dr. Mohamed Muizzu to address challenges Maldivians may face due to the war in the Middle East, Finance Minister Moosa Zameer stated that steps have been taken to ensure essential services remain available to the public without disruption during the war.
Minister Zameer noted that the top priority is to ensure the import of fuel, staple foods, and medicine, as well as to provide funds without difficulty to students studying abroad. He stated that a technical-level committee has been formed in collaboration with the central bank (MMA), the Finance Ministry, and the Maldives Inland Revenue Authority (MIRA) to research and monitor the shocks to state revenue caused by the war.
As many tourists arriving in the Maldives transit through Middle Eastern countries, he noted that the war would have a significant impact on the country's revenue and economy.
"When looking at oil and gas, we have them without any difficulty. However, the price of fuel has increased significantly," Zameer said.
"The President’s thinking is to maintain fuel prices in a way that does not increase this burden on the general public. In that sense, to carry it out in a way that does not cause difficulties for certain businesses as well."
Minister Zameer stated that in addition to the subsidies the government provides to STO for fuel imports, it has been decided to further cross-subsidize fuel using a portion of the profits the government receives through the company.
"We have now planned to give one part of STO's profit, for example, as a subsidy from the government. In addition to that, if we anticipate that STO's profit will be MVR 1.5 billion this year, we are trying to see if we can absorb the cost by cross-subsidizing a part of that profit," he said.
"In reality, when STO last increased fuel prices, it did not reflect the actual change that came to the market. It was much lower than that, and some people spoke about it while being mistaken."
Minister Zameer stated that when STO loads fuel onto barges, the price is calculated based on the average price of 3-4 days. Therefore, he said that determining the price of fuel is a very difficult task and that "prices are not increased just like that." He also noted that unlike other countries, the Maldives does not constantly change fuel prices.
He stated that STO currently has two vessels of adequate capacity to import the fuel required for the Maldives.
"We were very lucky this time, God willing, as STO purchased a new 24,500 metric ton vessel at the start of this year in January. Therefore, the fuel we require is always in transit," he said.
STO also has an additional 22,000 metric ton vessel. Typically, fuel is brought to the Maldives via STO from Oman.
Minister Zameer said that one of these vessels will arrive in the Maldives within the next 4-5 days with a new shipment of fuel. He also stated that the second vessel will begin its journey to the Maldives tonight after being loaded with fuel.
