Minister of Finance Ibrahim Ameer has said the government has completed the paperwork on the changes to the fuel subsidies and that President Ibrahim Mohamed Solih will make final a decision.
Speaking at a press conference held at President's Office, Minister Ameer said the changes in subsidies will affect a lot of people and therefore, subsidies will be given to those who need to be subsidised only when the entire mechanism is assured of proper changes. He said the policy to provide a targetted subsidy to the neediest people has been discussed in cabinet meetings with a final decision to be made soon.
In a televised address to the nation on the occasion, President Solih previously revealed the government will soon change the policies on fuel subsidies in order to benefit the citizens most in need of the subsidies. He 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 interventions. 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.
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.
International financial institutions have recommended changes to the subsidy system in the Maldives. The institutions also noted the government offer subsidies to those who do not necessarily need them.