PALIKIR, Pohnpei—On November 28th, 2022, His Excellency David W. Panuelo—President of the Federated States of Micronesia (FSM)—signed an emergency regulation, and proposed permanent regulation, implementing Public Law 22-139. Public Law 22-139 for the States of Chuuk and Kosrae, for example, remits 20% of tax revenue directly to the States for their respective Legislative Branches’ appropriation, but for the State of Pohnpei the law describes that—for Fiscal Year 2023—that the taxes “shall be remitted to fuel wholesalers for the purpose of providing a fuel subsidy on gasoline, diesel, and kerosene to Pohnpei residents.”
The practical effect of the regulation the President signed is that the FSM Petroleum Corporation shall apply the subsidy to discount the fuel purchases of the Pohnpei Utilities Corporation, which shall in turn pass the subsidy on to its residential customers in the form of discounted cash power (or electricity bills for postpaid accounts). This was determined to be the most accountable means of ensuring that the fuel subsidy has the widest and most transparently positive impact on residents of Pohnpei State, as there are significantly more households than cars and trucks.
“We’re looking at a subsidy of $1.54 per gallon,” President Panuelo said in a statement, “and so—if the current rate of power in Pohnpei is 61 cents per kilowatt hour, residents will save 29 cents, resulting in a price of about 32 cents per kilowatt hour. In other words, if your power bill today is $100 for the month, you are going to be looking at paying about $50 for the same amount of power, thus allowing you to put more money towards gas for your car, groceries for your family, Christmas presents for your kids, and just to help each other during this rough economic period.”
The subsidy takes effect immediately and shall be in place for the remainder of Fiscal Year 2023 i.e., September 30th, 2023.
“I extend my deepest appreciation to the Honorable Wesley W. Simina, Speaker of the 22nd FSM Congress, and the rest of the Congress, with special thanks to the Pohnpei delegation—the Honorable Peter M. Christian, the Honorable Ferny S. Perman, the Honorable Dion G. Neth, and the Honorable Esmond B. Moses—for their leadership in easing some of the burdens our citizens are facing.”
The regulation may be found here: https://gov.fm/files/November_28_2022_-_Fuel_Subsidy.pdf
