The Central Bank of Solomon Islands has warned that households and businesses should prepare for higher fuel and electricity prices as global oil markets react to the US–Israel war against Iran entering its third week. In a preliminary assessment released this week, the bank said sustained increases in international crude prices are likely to feed through into domestic fuel costs, with secondary effects on electricity tariffs.
Current average retail fuel prices at Honiara pump stations stand at SBD9.38 per litre, the central bank noted, and it expects the impact of the latest oil-price shock to begin filtering through to domestic prices from April 2026 onwards. The assessment did not provide specific forecasts for the scale of increases, saying the ultimate effect will depend on how long the conflict persists and how global fuel supplies are disrupted.
The central bank pointed to the 2022 Russia–Ukraine war as a local precedent. At that time Brent crude reached about US$120 a barrel and Honiara’s average retail fuel prices jumped by 32 per cent to a record SBD14.47 per litre. Electricity tariffs also rose — by as much as 10.7 per cent — illustrating a direct pass-through of higher global fuel costs into the cost of power for consumers and businesses.
The bank’s statement underscores the Solomon Islands’ vulnerability to external energy shocks. The country imports nearly all of its refined fuels and is therefore exposed to rapid swings in global crude and refined product prices, which can feed into transport, shipping and power-generation costs across the economy. For many households, higher pump prices and rising electricity bills would intensify cost-of-living pressures already felt across the Pacific.
Regional governments are closely watching developments. In recent months neighbouring Fiji has signalled it is monitoring international events that could push up oil prices and said it was prepared to respond if necessary, reflecting a broader Pacific concern about spillovers from geopolitical conflict. The Solomon Islands central bank did not indicate any immediate policy measures but said its assessment is preliminary and contingent on evolving market conditions.
The central bank’s alert serves as an early warning to consumers, businesses and policymakers to factor rising energy costs into budgets and planning. With the timing of pass-through expected from April next year, firms that rely heavily on fuel and power will have some lead time to consider mitigation measures, but the bank cautioned that sharp price moves could still materialise if supply routes are disrupted or markets panic. Source: Indepth Solomons.
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