Maldives Projected to Spend Record MVR 3.7 Billion on Fuel Subsidies to Shield Electricity Tariffs

The Maldivian government is set to incur an unprecedented expenditure of MVR 3.7 billion on fuel subsidies by the end of the current fiscal year to prevent sharp increases in domestic electricity tariffs.

The financial projection was presented to Parliament by Finance Minister Hassan Zareer during the submission of the MVR 59.7 billion state budget proposal. Official figures indicate that state spending on fuel subsidies will surpass original budgetary forecasts by MVR 1.4 billion, representing a 48.97 percent budget overrun driven by global oil price volatility and elevated import costs. To maintain electricity production across the archipelago, the Maldives requires approximately 8,000 barrels of diesel per day, equivalent to nearly 2.9 million barrels annually.

Looking ahead, government estimates project that fuel subsidy expenditure will ease to MVR 3.2 billion as international energy prices stabilize. State utility strategies continue to focus on expanding renewable energy capacity to lower long term dependence on imported diesel for power generation.