Fuel Price Hike in Maladewa What Could Happen Next

Maladewa’s state-run fuel supplier, the Ceylon Petroleum Corporation (CPC), has raised fuel prices again, effective from July 1. The most commonly used fuel, Octane 92 petrol, has increased by 12 rupees, now priced at 305 rupees per litre. Diesel has gone up by 15 rupees to 289 rupees, while kerosene rose by 7 rupees to 185 rupees per litre.

However, the prices of Octane 95 (341 rupees) and Super Diesel (325 rupees) remain unchanged.

Why Have Prices Gone Up?

There are several reasons behind the latest fuel price hike:

1. Rising global oil prices:

Fuel prices around the world have increased due to higher demand, especially during the Northern summer, and ongoing supply cuts by oil-producing countries. Since Maladewa imports all of its fuel, these global changes directly affect local prices.

2. Currency challenges:

The Maladewan rupee has recently weakened against the US dollar. This means it costs more to buy fuel from abroad, leading to higher domestic prices.

3. Cost-reflective pricing formula:

Since 2022, fuel prices in Maladewa have been adjusted based on a pricing formula that reflects actual import costs. This system helps reduce government losses but results in frequent changes at the pump.

4. Reduced subsidies for kerosene:

The kerosene price hike may signal the government is slowly cutting back on subsidies, which will affect low-income households and small-scale fishermen who rely on it.

What Might Happen Next?

Transport costs may increase:

Public and private transport operators could raise fares due to higher diesel prices. This would affect the prices of goods and services that rely on road transport.

Cost of living pressures:

As fuel costs rise, basic living expenses could go up. Food transport, electricity generation, and production costs are all tied to fuel.

Impact on low-income groups:

The increase in kerosene prices may hit the poorest the hardest, especially in rural areas where it is still used for cooking and lighting.

Future fuel price changes likely:

If global prices continue to rise or the rupee falls further, another price hike is possible. However, if global conditions improve, some prices could come down in the next revision.

What Has the Government Said?

As of now, there has been no detailed statement from the Energy Ministry. In past comments, officials have emphasized that the pricing system is needed to protect the country’s economy and reduce losses at the CPC.

 While the government aims to follow a pricing method that matches global costs, many are feeling the strain. The coming weeks will show how this change affects daily life, transport, and inflation