Middle East Conflict: Government remains proactive to shield consumers from external pressures

Mauritius as a small, open and highly import-dependent economy, is particularly exposed to global developments related to the ongoing Middle East conflict.

The Minister of Commerce and Consumer Protection, Mr John Michaël Tzoun Sao Yeung Sik Yuen, made this statement, today, in reply to a Private Notice Question in the National Assembly.

He noted that the Middle East, being central to the global energy system, has seen heightened geopolitical risks due to the conflict, creating sustained uncertainty in global energy and trade dynamics, to which Mauritius is highly exposed.

The Minister explained that the domestic economy may be impacted through higher international petroleum prices affecting transport, electricity generation and production costs; rising global food and agricultural input prices increasing the cost of imported food; the strengthening of the US dollar raising the cost of imports; logistical constraints adding to operational and cost pressures for importers; and tighter foreign exchange availability and payment timelines affecting importers’ cash flow and pricing structures.

He further indicated that the Macroeconomic Coordination Committee has assessed various scenarios and concluded that Mauritius is mainly affected through higher fuel and food import bills, increased freight and insurance costs, and potential impacts on foreign direct investment and the tourism sector. Inflation projections for 2026 have also been revised from an initial estimate of 3.6%–4% to potentially around 6%, depending on global oil and commodity price trends.

To ensure a coordinated and proactive response, the Minister announced the setting up of a High-Level Committee chaired by the Financial Secretary to monitor developments, assess economic implications and recommend policy measures. A Sub-Committee has also been established to specifically assess the impact on SMEs and vulnerable groups and propose appropriate support measures.

Price Stabilisation Fund

Regarding the Price Stabilisation Fund, the Minister recalled that a fixed-quantum subsidy scheme introduced in August 2025 covers essential commodities such as milk powder, edible oil, infant milk, baby diapers and processed cheese. To date, approximately Rs 628 million has been disbursed to eligible operators, with total disbursements expected to reach around Rs 1.5 billion by the end of the financial year.

Price Stabilisation Account for Mogas and Gas Oil

As for the Price Stabilisation Account for Mogas and Gas Oil, he indicated that as at 23 March 2026, the account shows a surplus of around Rs 400 million for Mogas and a deficit of approximately Rs 2.3 billion for Gas Oil, resulting in a net deficit of about Rs 1.9 billion.

He emphasised that this mechanism plays a critical stabilising role by allowing Government to moderate sharp fluctuations in global oil prices and adopt a calibrated approach in determining retail prices, thereby protecting consumers and maintaining economic stability.

The Minister stressed that Government’s response is based on a comprehensive and coordinated framework combining targeted subsidies, strict price control measures and proactive supply chain management to cushion the impact of global shocks on consumers.

24 March 2026

Email: gis@govmu.org

Website: https://gis.govmu.org

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Topics: Commerce