Fiji’s private sector and regulators warned yesterday that the country faces a fresh round of cost pressures after global oil prices surged and trading markets plunged amid the widening US–Israeli–Iran conflict and a disruption of traffic through the Strait of Hormuz. The Fiji Commerce & Employers Federation (FCEF) said the overnight 29 percent spike in crude pushed oil above US$100 a barrel for the first time in four years and will translate into higher costs for goods and services across the Pacific.
“The price of a barrel of oil jumped up 29 per cent and markets in major trading countries in Asia plummeted as a result. We are now seeing tangible impacts on markets which will ultimately affect the Pacific and Fiji,” FCEF chief executive Edward Bernard said in a statement, warning businesses to be “vigilant in terms of investment decisions, employment considerations and ensuring fair prices for consumers.” Bernard urged government to consider a financial support package for businesses should the Middle East crisis prolong.
The market rout was immediate: media reports cited by FCEF said the Australian ASX 200 lost more than US$94 billion in market capitalisation as Asian exchanges reacted to the supply risks. Singapore — the hub through which virtually all of Fiji’s fuel imports are routed — has already issued warnings to businesses and consumers, heightening concerns about fuel availability and shipping disruptions to the Pacific.
Reserve Bank of Fiji governor Ariff Ali has previously flagged the scale of the risk. Speaking at the State of the Economy Business forum last week, Ali warned Fiji could lose almost US$500 million in foreign reserves if oil prices rise from US$60 to US$100 a barrel, and he hinted that authorities may have to consider currency adjustments should “instability… high inflation… [and] pressure on our foreign reserves” force their hand. That forecast now takes on greater urgency with crude breaching the US$100 mark and analysts saying the price could climb above US$150 a barrel if the Strait of Hormuz remains closed until the end of March.
Regulators are keeping a close watch. The Fijian Competition and Consumer Commission (FCCC) appealed to the public to avoid panic buying and fuel hoarding and urged responsible fuel use. The FCCC has repeatedly noted that Fiji is a price-taker for fuel — importing all its petroleum — and that international price moves typically hit local pump prices with about a one-month lag. Any sustained jump in oil will therefore feed quickly into transport and food costs, given higher freight and production expenses.
Economists have stressed the upside risk if the conflict persists. ANZ Pacific economist Kishti Sen, writing earlier in an op-ed when West Texas Intermediate was trading around US$75, warned that traders’ current bets on a short conflict could be wrong; should the war escalate, a larger geopolitical risk premium would be applied to oil and prices “could quickly” climb well above current levels. Sen urged policymakers to prepare contingency plans to protect household affordability for groceries and transport.
For now, the combined message from business and regulators is precautionary: prepare for higher input costs, monitor supply chains, and avoid panic purchasing that would amplify shortages. How quickly these international shocks filter through to retail fuel, freight and food prices in Fiji will depend on how long the Hormuz disruption continues and what policy support the government and central bank deploy to cushion businesses and consumers.
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