Government meets National Parliamentary Committees to begin public hearings on the supplementary 2026 GSB
Today, May 21st, 2026, the National Parliament began a series of public hearings organised by the Standing Specialised Committees to review the proposed first amendment to Law No. 8/2025 of November 27th, regarding the General State Budget for 2026 (2026 supplementary budget), with a view to ensuring the necessary legal and budgetary instruments to address exceptional needs related to energy security and fuel supply. The sessions will include participation by members of the Government and senior officials from the Public Administration to present and explain the proposed amendments.
The proposed Supplementary Budget was submitted to the National Parliament on May 15th by Prime Minister Kay Rala Xanana Gusmão to the Speaker of the National Parliament, Maria Fernanda Lay, in the presence of Finance Minister Santina José Rodrigues F. Viegas Cardoso, the Vice-Minister of Finance, Regina de Jesus, and the Vice Minister for Parliamentary Affairs, Adérito Hugo da Costa.
The public hearings will take place on May 21st, 22nd, and 25th and are intended to review the proposed adjustments to the 2026 GSB, approved by the Council of Ministers at its meeting on May 13th. The law proposal emphasises that “the current international geopolitical context, marked by high instability in energy markets, resulting in particular from the conflict in the Middle East, has caused sharp fluctuations in international oil prices.”
The document also notes that “the current international situation is marked by serious geopolitical instability stemming from the armed conflict in the Middle East, with direct repercussions on international energy markets” and that “disruptions in global fuel supply chains, constraints on maritime routes, imposed sanctions, and sharp fluctuations in hydrocarbon prices jeopardise the energy security of countries that depend on imports of oil and its derivatives.”
The proposal states that “in this context, ensuring strategic diesel reserves is essential to guarantee the uninterrupted operation of the national power grid”. It warns that “any shortage of supply on the international market could jeopardise households’ and businesses’ access to this essential commodity, with direct repercussions for social and economic stability.”
The law proposal also states that “it is necessary and urgent to adjust the projections made in the 2026 GSB and the corresponding budget appropriations” and adds that “it is therefore necessary to adjust the budget appropriations approved under the 2026 GSB to allow the purchase of an additional volume of fuel.”
The Supplementary Budget report notes that Timor-Leste, as an economy heavily dependent on imports, remains vulnerable to external shocks arising from rising prices for fuel, transport, and food. The document notes that the Government has introduced “a targeted and temporary fiscal adjustment” to mitigate the immediate economic impacts of these external shocks while preserving medium-term fiscal sustainability.
“The Supplementary Budget includes a package of measures totalling US$271 million, covering ‘energy security through the establishment of the National Strategic Fuel Reserve (US$174.3 million) to ensure up to approximately seven months of EDTL consumption and the continuity of electricity production’, as well as ‘stabilisation of fuel prices and protection of purchasing power, with a fuel subsidy programme (US$42 million)’”
Other measures include “food security through replenishing rice stocks at the National Logistics Centre (US$5 million)”, “national security with additional funding for the recruitment of 400 PNTL cadets (US$3 million)”, “fulfilment of international commitments, including expenses related to East Timor’s Pro Tempore Presidency of the CPLP -Leste (US$2 million)”, “additional funding for the new administrative structure, operation, maintenance, and equipment of notary services (US$3.9 million)”, and “strengthening the Contingency Reserve (US$40.9 million) to preserve the capacity to respond to external shocks, urgent needs, and supply risks”.
Under this amendment, the consolidated amount of the 2026 GSB increases by US$101.1 million, rising from US$2.291 billion to US$2.392 billion. The increase in the budget amount does not result from increased transfers from the Petroleum Fund, but rather from the realignment of the government’s financing sources, including management balances, available balances in non-operating bank accounts, and increased domestic revenues.
According to the Ministry of Finance, “macroeconomic conditions remain largely resilient despite the worsening external environment” and “average annual inflation, which fell sharply to 0.5 per cent in 2025, is expected to rise to 2.2 per cent in 2026 due to new inflationary pressures from imports.” However, “the Government’s subsidy measures are expected to partially cushion the transmission of external price shocks and support household purchasing power, especially among vulnerable groups.”
The law proposal also emphasises that “the request for priority and urgency is justified by the need to ensure, without delay, the continuous supply of fuel to the population, essential public services, and national productive sectors” and that “any delay in adopting these measures could jeopardise the regular operation of thermal power plants, the stability of the national power grid, and access to fuel for households and economic operators.”
The public hearing process will continue over the next few days, ahead of the resumption of parliamentary deliberations and a plenary vote on the proposed amendment to the 2026 GSB.
