Maldives’ monthly spending on fuel for electricity rises by 110% to USD 116 million

Environment Ministry, on Tuesday, revealed that government expenditure on fuel imports has increased by 110 percent due to the ongoing conflict in the Middle East, with monthly spending now reaching USD 116 million.

Speaking at a press conference held at the President’s Office this morning, the Ministry’s Director General, Ahmed Ali, stated that prior to the conflict, the Maldives had spent approximately USD 50 million per month on fuel imports.

However, following the escalation of tensions in the Middle East, monthly fuel import expenditure rose to USD 116 million from March onwards, representing an increase of 110 percent, or an additional USD 61 million in monthly costs.

"Before the current Middle East conflict, we were spending roughly USD 50 million a month on fuel imports. However, that figure has now risen to USD 116 million per month, based on data up to March," Ahmed Ali said.\

He further warned that fuel import costs are expected to continue increasing for as long as the conflict persists.

Ahmed Ali explained that the Maldives remains highly vulnerable to fluctuations in global oil prices due to the absence of domestic fossil fuel reserves and the country’s heavy reliance on imported fuel supplies.

"Therefore, we must reduce our dependence on diesel and other imported fuels and transition towards the renewable energy resources available within the country," he emphasized.

At present, Oman supplies 98 percent of the fuel imported into the Maldives, raising concerns over potential disruptions to fuel shipments amid the continuing instability in the Middle East.

Following the escalation of tensions in the region in late February, the Maldivian government stated that it is working to reduce its dependence on Oman while exploring alternative sources for fuel imports.

In late April, Reuters reported that China had approved the export of 500,000 tonnes of fuel to destinations outside Hong Kong for the month of May. The move followed a temporary suspension of fuel exports last month due to the Middle East conflict. According to the report, the volume allocated for May was double the amount approved during the previous month.

Reuters further reported that the Maldives, Australia, Bangladesh, Cambodia, Laos, Myanmar, New Zealand, and Sri Lanka were among the countries purchasing fuel from China. Citing unnamed sources, the report stated that 40 percent of the allocated exports would consist of diesel and jet fuel.

Despite the sharp increase in global oil prices and the mounting financial burden of fuel imports during the conflict, the Maldivian government has maintained that it does not intend to further increase domestic fuel prices. Additionally, President Dr. Mohamed Muizzu announced last March that the government is conducting research into establishing a national fuel reserve.