The State Trading Organization (STO), responsible for the majority of fuel imports into the country, has announced a reduction in petrol and diesel prices for the third consecutive time this year. Diesel prices per litre were reduced by MVR 0.45, and petrol by MVR 0.40.

A litre of diesel will now cost MVR 14.62, with petrol costing 14.33 per litre, according to the announcement made on Friday. Prices had previously been MVR 15.07 and MVR 14.73, respectively, per litre.

This move comes as global fuel prices exhibit a downward trend. Globally, fuel prices have been fluctuating. As of early December 2023, the average global price of gasoline is around 1.33 U.S. Dollars per litre, with significant variations observed across different countries. 

These prices are influenced by a variety of factors including geopolitical situations, supply and demand dynamics, and global economic trends. In particular, crude oil prices have seen a notable decrease, reaching a five-month low of approximately $69 per barrel in December 2023, significantly lower than the $91 per barrel recorded in September 2023. This decrease in crude oil prices is expected to impact fuel prices in various countries, including those dependent on imports like the Maldives.

As the main trading state-owned enterprise (SOE), STO has traditionally been used as an indirect price controller, and stabiliser, on staples and fuel where the government provides subsidies directly to the company, which is then passed down to consumers.

STO is a majority state-owned enterprise trading in petroleum, cooking gas, construction materials, medical supplies, pharmaceuticals, home appliances, electronics, supermarket products, and insurance. While the state owns 82 percent, the remaining 18 percent is publicly held. The company is led by the new Chief Executive Officer and Managing Director, Shimad Ibrahim, who was confirmed on 28 November by the STO Board of Directors.

Additional reporting by Andrew Richards