Government spending on fuel subsidies is projected to decline to MVR 3.2 billion in 2027, down from an estimated MVR 3.8 billion this year, Finance Minister Hassan Zareer has said.

Presenting the proposed 2027 State Budget to Parliament, the Minister said rising global oil prices amid the Middle East conflict had significantly increased Government expenditure.

He said higher fuel prices affect electricity generation, transportation and the overall cost of living, adding that the Government had worked to cushion the impact on households and businesses.

The Minister said fuel subsidies had increased substantially this year as the Government continued supporting affordable electricity for the public.

However, international forecasts indicate that oil prices are expected to decline next year, reducing the projected cost of fuel subsidies.

The proposed State Budget for 2027 totals MVR 59.7 billion.