Díli, March 25, 2026 (Lusa) - Timor-Leste’s government approved a decree on Wednesday setting fuel price caps due to the Middle East conflict’s impact.

"The decree sets maximum consumer sales prices, fixing petrol at $1.50 per litre, diesel at $1.65, aviation fuel at $2.50 and liquefied petroleum gas (LPG) at $4.2 per kilogram," according to a press release.

Oil and Natural Resources Minister Francisco Monteiro presented the decree-law, which was approved at Wednesday's cabinet meeting. He mentioned last week the possibility of government intervention following fuel price rises caused by the Iran conflict.

"The decree aims to mitigate the impact of international instability on the energy sector, protect household purchasing power, reduce the effect of price rises on the economy and ensure economic activities continue while guaranteeing fuel availability," the government said.

According to the government, importers will also present actual import costs to "calculate the state subsidy, funded through the state budget".

The decree-law also includes measures to guarantee supply continuity, including defining import strategies between public entities and sector operators and adopting exceptional market regulation mechanisms.

It also strengthens the role of competent authorities in preventing the diversion of subsidised fuel out of the country.

The measures will be in force until the end of the year and may be reviewed, extended or terminated depending on international market trends.

The US and Israel launched a military attack on Iran on 28 February 2026. They justified the move with the Islamic Republic's inflexibility in negotiations to end uranium enrichment in its nuclear programme, which it says is only for civilian purposes.

In retaliation, Iran closed the Strait of Hormuz and launched attacks against targets in Israel, US bases and civilian infrastructure in Saudi Arabia, Bahrain, the United Arab Emirates, Qatar, Kuwait, Jordan, Oman and Iraq.

MSE/LYT // ADB.

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