The government spent an additional MVR 453 million on electricity subsidies last year after deciding not to implement planned changes to the subsidy system.
According to statistics released by the Ministry of Finance, MVR 379 million had originally been allocated in the state budget to reduce electricity costs. However, total spending reached MVR 832 million by the end of the year, exceeding the budget by MVR 453 million.
Food subsidies also recorded a significant increase. While MVR 93 million was budgeted to help control food prices, actual expenditure rose to MVR 383 million, representing an increase of 312 percent.
The government had proposed replacing universal subsidies as part of efforts to reduce state expenditure by MVR 2.4 billion. However, President Dr. Mohamed Muizzu decided to postpone the implementation of those changes.
The Statistics Bureau reported that food prices in the Maldives increased by 4.7 percent last year, marking the largest rise in recent years. The government also continues to spend heavily on supplying fuel to STELCO and Fenaka at below-market prices to keep electricity costs affordable.
Looking ahead, the government plans to reduce subsidy costs by expanding the use of renewable energy. According to the budget, introducing renewable energy across the Greater Malé Region could save an estimated MVR 13.9 billion over the next ten years.
