Government expenditure on subsidies has increased to MVR 2.3 billion amid rising global oil prices linked to instability in the Middle East, figures released by the Ministry of Finance and Public Enterprises show.

In its latest Weekly Fiscal Developments report, as of 14 May, the figures show that spending on subsidies rose by MVR 993.1 million, or 77.8 per cent, compared to the MVR 1.3 billion recorded during the same period last year.

The Ministry attributed the increase primarily to higher fuel subsidy costs for electricity generation, following the rise in global oil prices.

Meanwhile, expenditure on debt repayments and interest costs remained relatively stable during the period, totalling MVR 2.1 billion.

Government subsidies have helped keep prices of essential goods and services stable despite fluctuations in international markets, limiting the impact on the public.

The Government also stated that fuel import expenditure has risen by more than 110 per cent due to the ongoing situation in the Middle East. Monthly spending on fuel imports has now reached USD 116 million.

Despite the increase in expenditure, the Government said it currently has no plans to increase domestic fuel prices, citing efforts to minimise the burden on the public amid prevailing global economic conditions.