Subsidy expenditure reaches MVR 2.3 billion amid higher oil prices

The government has spent 78 per cent of its subsidy budget for 2026, driven largely by higher fuel subsidy costs linked to rising global oil prices.

According to the latest revenue and expenditure figures released by the Ministry of Finance and Public Enterprises, subsidy expenditure reached MVR 2.3 billion as of 14 May.

The state budget allocated MVR 2.9 billion for subsidies this year, meaning MVR 2.3 billion spent so far accounts for 78 per cent of the total allocation.

During the same period in 2025, subsidy expenditure stood at MVR 1.3 billion. This year's spending represents an increase of MVR 993.2 million, or 77 per cent.

The increase comes amid higher oil prices following the conflict involving Iran, which has raised the cost of fuel subsidies provided by the government.

The figures also show a decline in expenditure on the national health insurance scheme, Aasandha.

By 14 May, spending on Aasandha had reached MVR 805 million, a decrease of MVR 2 million compared with the same period last year.

Expenditure on other medical welfare assistance programmes also declined during the period, falling by MVR 21.5 million.

While health-related welfare spending declined, expenditure on other subsidies and allowances increased.

The government spent MVR 1.1 billion under this category during the reporting period, compared with MVR 640 million during the same period last year.

This represents an increase of MVR 432 million.

The figures indicate that rising fuel-related costs continue to be a key factor driving subsidy expenditure in 2026, placing pressure on the annual budget allocation.