The Utilities Regulatory Authority (the Authority) has successfully implemented the Government of Vanuatu's electricity fuel subsidy programme, delivering almost the full VT192 million support package approved by the Council of Ministers (CoM) to help protect households and businesses from the impact of global fuel price increases.

The subsidy was introduced following Council of Minister’s Decision No. 108, which approved a phased VT192 million subsidy for the electricity sector. The subsidy was funded through direct support based on fuel usage by electricity providers and formed part of the Government's broader response to international fuel price volatility and its impact on the cost of living in Vanuatu.

To enhance transparency and accountability, the Ministry of Finance and Economic Management (MFEM) approved the direct transfer of the subsidy funds to the Authority.  This enabled the Authority to incorporate the subsidy into its monthly electricity tariff adjustment process, ensuring that the financial benefits were passed directly to electricity consumers through reduced tariff adjustments.

Between June and September 2026, the subsidy supported electricity generation fuel costs incurred by UNELCO Engie, Vanuatu Utilities and Infrastructure Limited (VUI), and Vanuatu National Power and Water Authority (VANPAWA). During the four-month implementation period a total of 5.2 million litres of fuel was subsidized, withVT191.96 million disbursed, representing approximately 99.98% of the allocated VT192 million fund. The distribution of subsidy funds by Utility is presented in the table below.

The subsidy was initially applied at 60 vatu per litre (VAT inclusive) during the June billing period, before transitioning to 30 vatu per litre from July onwards. In September, the subsidy level was adjusted to 26.2 vatu per litre to ensure the subsidy remained within the approved VT192 million allocation while maximizing consumer benefits.

The subsidy delivered direct financial relief to electricity customers across the country during a period of elevated international fuel costs. By channeling the support through the tariff-setting mechanism, the Government ensured that the benefits reached consumers in a transparent, targeted and accountable manner.

The programme also included ongoing verification of fuel consumption data submitted by utilities, together with regular reporting to the MFEM. These measures helped ensure compliance with the conditions established under the subsidy arrangement and strengthened oversight of its implementation.

While global fuel markets continue to stabilize, the Government's intervention helped cushion the impact of international fuel price shocks on electricity costs and demonstrated its commitment to supporting households and businesses during periods of economic uncertainty.

For more information on monthly electricity prices, please visit the URA Facebook page or website at www.ura.gov.vu