The government has lifted the petrol subsidy for the current pricing cycle under the latest fortnightly revision issued yesterday. However, the diesel subsidy will continue due to its importance in transportation and essential services.
Petrol users will now have to pay the full market price under the latest revision.
Petrol prices increased from Nu 102.40 to Nu 109.85 per litre, while diesel prices rose from Nu 98.31 to Nu 100.89 per litre.
According to the Prime Minister’s Office news release, no subsidy will be provided for petrol during this cycle. This is because petrol is primarily used in private vehicles and people have greater flexibility to reduce consumption through walking, carpooling and using public transport.
Diesel, however, will continue to receive government support because of its critical role in transportation, food supply, and delivery of essential goods across the country.
The government is subsidising diesel by Nu 23.21 per litre. Without the subsidy, diesel would cost Nu 124.10 per litre.
The government says continuing diesel support will help reduce the burden on consumers and protect the wider economy from rising fuel costs.
But the subsidy is costing the government heavily. Since the National Fuel Price Smoothing Framework was introduced in March this year, the government has spent Nu 1.45bn on fuel subsidies, most of it on diesel alone.
The government expects to spend more than Nu 202 M during the current pricing cycle, which will continue until the 1st of June.
Fuel prices will continue to be reviewed every 15 days under the National Fuel Price Smoothing Framework.
Meanwhile, the government has reiterated its “Walk to Office and Remote Work” directives issued earlier last month.
Public agencies have been asked to limit the use of pool vehicles to essential duties, reduce non-essential travel, prioritise virtual meetings, and encourage carpooling and shared transport among employees.
The government is also urging both the public and private sectors to play their part by walking, cycling, using public transport, and combining errands into fewer trips wherever possible.
Kinley Bidha
Edited by Sonam Pem
