29th June, 2022 TONGAN The continuous global surge in energy prices has caused historical new highs of the local fuel prices in Tonga to over $4 Pa’anga per litre, for petrol and diesel, increase in gas per kilogram, and diesel power. The extent and duration of the global petroleum price crisis is further hiked by the uncertainty of the political tensions in Ukraine, the resultant economic sanctions, and its extensions.
In response, the Government has approved new fiscal policy to reduce the social impact on all households from the high energy prices with effect from 1st July, 2022 for three months, to subsidize the increase in prices by:-
(i) The Government paying 20 seniti per litre for each of the petroleum products (petrol, diesel and kerosene); and
(ii) The Government paying 15 seniti per kwh, from the 18 seniti increase in electricity tariff. The new 15 seniti subsidy per kwh is in addition to the existing 6.7 seniti per kwh subsidy, plus the 11 seniti per kwh lifeline subsidy for eligible consumers whose consumption is below 150 kwh per month;
The continuity of the subsidies will be reviewed before the end of September 2022 depending on the extent of further increases and duration.
Acting Prime Minister and Minister Responsible for Energy, the Hon. Poasi Tei, stated “This high increase is more pronounced for, and severely felt by, households at the lower end of the income distribution, and in the outer islands. The approved subsidies are crucial to alleviate the impact on the most vulnerable households. The subsidy will supplement the Government social protection assistance to the elderly, special needs, and through constituencies throughout the country.”
Members of the public are requested to please take measures to minimize the negative impacts of the petrol and electricity tariff increases including consideration of cost savings measures until the price returns to normal.
ENDS
Issued by: The Prime Minister’s Office, P.O. Box 62, Nuku’alofa, Tonga. Tel: (676) 7401351 Fax: (676) 23 888; For media enquiries- Email: pressroom@pmo.gov.to Website: www.pmo.gov.to