The global oil prices have fallen significantly due to the halt in economic activities as COVID-19 spreads across the world. The demand for oil in the global market has fallen with excessive production of oil in March has led to oil prices falling to record levels. Will this lead to a fall in electrical charges in the Maldives?
With the spread of COVID-19 in the country, resorts were closed and several economic activities came to a halt as well, leading to a vast number of redundancies, layoffs, and wage cuts. As a result, many locals are struggling to pay rents and other utilities.
Conversely, if there are a global economic slowdown and the demand for oil drops, the price of oil will also be lowered. Which often leads to electricity pricing fluctuations in other countries. However, it does not apply in the Maldives.
According to STELCO in the Maldives, fixed price plans are implemented, meaning that the electricity rates are set by the government and changes to the global oil market does not have any effect on it. Maldives has set a subsidized rate of oil prices to STELCO and FENAKA to ensure consistent electricity charges across the country.
In addition to that, the government will be subsidizing 40% of the electricity bill in April and May month, to financially assist the public during the economic downfall.
A decline in electricity charges with the fall in global oil prices is less likely in the Maldives, as the government has set a controlled rate of electricity in the country. Thus, STELCO urges the residence of Male’ city to economize the usage of electricity during this time.
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Source URL: Corporate Maldives