State wholesaler State Trading Organization (STO) will focus solely on importing fuel, food staples and pharmaceuticals, the Economic Council has announced at a press conference today.
The move is part of the government’s decision to move STO out of the retail business in order to encourage private businesses, Economic Development Minister Mohamed Saeed said.
However, the STO has recently launched a new brand of groceries called Noofahi as well as announcing plans to expand the supermarket at the STO Trading Center in Malé.
Tourism Minister Ahmed Adeeb added that STO will be restructured and will build new fuel storage facilities, establish a shipping fleet to import oil and will take measures to increase fuel security.
Meanwhile, STO MD Adam Azim today announced a MVR1.25 reduction on a liter of petrol and diesel following a request by President Abdulla Yameen.
Adeeb at today’s press conference pledged to further decrease fuel prices and said the government is looking into ways to reduce prices on jet fuel for domestic transport
Minister of Youth Mohamed Maleeh Jamal said the “historic” reduction would address rising inflation.
The Economic Council also said a German research vessel has found hydrocarbon source rocks in the Maldives and said the government is working with a Japan’s Mitsui and Taisei, and China’s Beijing Urban Construction Group (BUCG) to upgrade the Ibrahim Nasir International Airport (INIA).
The Maldives intends to ask for a preferential trade mechanism with China following partnership in China’s maritime Silk Road.
Finance Minister Abdulla Jihad said the Economic Council will hold monthly meetings with state owned enterprises to address challenges, facilitate financing, and strengthen management.
Oil exploration
Fisheries Minister Dr Mohamed Shainee said a preliminary assessment of hydrocarbons by Germany’s Hamburg University had brought “happy signals.”
The research team will handover detailed assessment in the first quarter of 2015, he said.
Although the presence of hydrocarbon source rocks have been confirmed, further research and analysis is required to determine if there are hydrocarbon reservoirs in the Maldives and their exact locations, Shainee explained.
The inner atoll ocean basins and atoll slopes have been examined, and new 3D seismic data will provide a more complete picture of presence of hydrocarbons, he said.
The government is setting up renewable energy alternatives in Malé and Addu, but such sources can only cater to 30 percent of Maldivian energy requirements, Shainee said.
Meanwhile, Sri Lankan, Indian, Norwegian, and British companies have expressed interest in assisting Maldives in oil exploration.
Approximately 30 percent of Maldives GDP is spent on fuel imports.
Airport Development
Adeeb revealed today that the Maldives is working with Japan’s Mitsui and Taisei, and China’s BUCG on a master plan for airport development.
The government intends to secure a US$600 million loan from Japan Bank for International Cooperation (JBIC) and China Exim Bank for the venture.
Once loans are sanctioned, the work will be contracted out, he added. In the meantime, the government will rehabilitate the existing runway.
Economic Development Minister Mohamed Saeed noted an increase in Chinese imports to Maldives, especially in heavy machinery, and said the Economic Council is working on establishing a preferential trade mechanism.
A technical team from China is due to visit the Maldives to undertake a survey for the Malé – Hulhulé bridge in the near future, the council said.
The council also revealed that the Maldives has signed a maritime labor convention, and intends to establish an open ship registry in order to expand maritime businesses such as offshore shipping and to increase luxury cruise ship arrivals in the country.
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A whole load of hot air and nothing more! There's more coconut oil in the Maldives than any other kind of oil!
This is policy inconsistency big time
STO (a profit making company) being narrowed down but MIFCO (loss maker) is propped up to squeeze out the private sector.
This is more a comedy of errors, nothing else.
If there had been nothing mentioned about the state controlling the very likely price hikes by the private sector; there is danger!
How about hash oil?
Let me tell you about corruption from STO.
Up until 2014, STO was supplying the second biggest brand of Milk Powder to the Maldives, Al-Mudhish. Although the import and sale of Milk Powder is not a huge percentage of STO's profits, Al-Mudhish is a strong and powerful brand, commanding the second largest marketshare in the Maldives, while also providing around 10-12% Gross Profit to STO.
Remarkably, in 2014 STO decides to import it's 'own' brand of Milk Powder (and assorted other products, but MP is the real golden goose here), abandoning a well-recognised and profitable brand of a high-value item. Customers have complained that the new STO product, while low in price, is of an extremely poor quality compared to other available brands of Milk Powder.
In the abandoning of Al-Mudhish brand by STO, look who has obtained the exclusive distributorship rights to Maldives for the brand? Non other than Red Wave Saleem, a famous PPM and Government supporter who has had a great interest in acquiring a great Milk Powder brand.
In an act that has gone missed by a great part of the public, STO (a state-owned company ultimately working in the benefits of the peoeple) has abandoned a profitable, successful and high value consumer brand (under the guise of producing it's own label of Milk Powder) while enabling a noted PPM and Government supporter to pick up the said brand.
To STO, the loss of Al-Mudhish itself will not have a great effect on it's annual turnover (as the far greater majority of its profits come from fuel). However, they have directly aided in providing a huge cash cow, to one of the supporters of the government, while losing a significant chunk of money from it's balance sheets.
The corruption of this regime, has and will know no bounds. There aren't enough people aware of it. The opposition party MDP is a deer caught in headlights, unable to protest or even highlight issues against the government in fear of reprisals.
@ Hussain,
and ypu know this as you've done extensive research and also personally worked there yourself? where do you get your facts from?