Higher electricity costs for large businesses and manufacturers are likely to have significant ramifications for the economy, warns Jitesh Patel, President of the Suva Retailers Association. This comes in light of the Fijian Competition and Consumer Commission’s recent approval of a 24.2 percent electricity tariff hike, which, although lower than the initially proposed 37 percent by Energy Fiji Limited, still raises concerns.
Patel emphasizes that increased production expenses will likely trickle down through the supply chain, exacerbating pressure on retail prices while consumers are already grappling with rising living costs. He points out, “EFL have said that most households won’t be affected, but if there’s a significant increase, there will be consequences for consumers.” He highlights that larger factories, particularly those involved in food production like rice mills and garment factories, will bear the brunt of these changes. Consequently, as their operational costs rise, consumers can expect a corresponding increase in the cost of goods.
Diren Kapadia, Director of Brijlal, acknowledges the challenge posed by the tariff increase, remarking that while it may not be advantageous for businesses, it is a reality they must learn to navigate. “It’s not favourable, but it is something we have to accept,” he stated, reiterating that inflation seems inevitable given current trends.
While the FCCC maintains that the new tariff is designed to balance Energy Fiji Limited’s financial sustainability with minimal impact on consumers and businesses, industry leaders remain wary. Prolonged surges in utility expenses could jeopardize pricing strategies, hinder investment opportunities, and ultimately erode overall business confidence in the long run.
Amid these challenges, there exists a hope that through strategic adjustments and innovations, businesses can adapt to the new landscape, ensuring that they remain resilient in the face of economic pressures.
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