Pacific Island Countries (PICs), including Fiji, remain highly vulnerable to global oil price shocks, with experts warning that the ongoing Middle East conflict could significantly impact fuel prices and economic stability across the region.
A 2009 study by the Asian Development Bank ranked seven PICs, including Fiji, among the top 10 most vulnerable countries on the Oil Price Vulnerability Index (OPVI), underscoring the region’s heavy reliance on imported petroleum products.
This concern has been reinforced by the Fiji National University’s College of Engineering and Technical and Vocational Education and Training (CETVET) Dean, Professor Atul Kumar Raturi, who highlighted the far-reaching implications of global fuel price volatility.
“Since all petroleum products are imported in the Pacific, any rise in fuel prices will affect PICs adversely, impacting every energy process from electricity generation to transport, and ultimately increasing the cost of goods,” Professor Raturi said.
He noted that the situation has been exacerbated by disruptions in global oil supply, particularly due to the partial closure of the Strait of Hormuz, a critical shipping route responsible for nearly 30 per cent of the world’s oil trade.
“The conflict has reduced global supply by approximately 7 to 8 million barrels per day. On 18 March, one of the largest gas fields shared by Iran and Qatar was attacked, pushing oil prices up to around USD 110 per barrel. This has triggered supply chain disruptions across Asia and Europe,” he explained.
Professor Raturi cautioned that the full impact of these developments may not be immediate saying “The effects will be felt in the coming days. Existing fuel shipments may temporarily cushion price increases, but future imports are likely to reflect higher global prices.”
He further referenced projections by Standard Chartered Bank, which has revised its average Brent crude price forecast for 2026 to USD 85.50 per barrel, up from USD 70.00, and for 2027 to USD 77.50, up from USD 67.00.
In light of these challenges, Professor Raturi stressed the importance of responsible energy use at both national and individual levels.
“Citizens can support Government efforts by being mindful of energy consumption. Using public transport, carpooling, reducing air conditioning usage, walking or cycling short distances, and adopting energy-efficient cooking methods such as induction stoves can help conserve limited fuel supplies,” he said.
Looking ahead, he emphasised the urgent need for a transition away from fossil fuels towards renewable energy solutions.
“To reduce dependence on imported petroleum, we must electrify key energy sectors including transport and manufacturing. This transition must be supported by renewable energy sources such as hydropower, solar, biomass and others,” he added.
Professor Raturi also pointed out that investment in solar energy presents significant long-term benefits.
“Each megawatt of solar installed in areas such as Nadi can reduce diesel consumption by over 300,000 litres annually. Despite initial capital costs, solar photovoltaic systems offer strong economic returns and enhance energy security,” he said.
Fiji’s tourism sector has already begun embracing renewable energy, with several island resorts installing solar systems. Additionally, utility-scale solar has become one of the most cost-effective sources of electricity globally, with costs declining by nearly 80 per cent in recent years.
However, Professor Raturi cautioned that increasing reliance on intermittent energy sources such as solar requires robust grid infrastructure and energy storage systems.
“While Fiji has substantial hydropower resources, approximately 40 per cent of electricity is still generated using diesel and heavy fuel oil. This must be significantly reduced in line with Fiji’s Nationally Determined Contributions and Low Emissions Development Strategy,” he said.
He added that other renewable options such as biomass, geothermal and wind energy should also be explored based on location-specific potential.
“Access to reliable and clean energy is essential to achieving broader sustainable development goals, including improvements in health, water, education and climate resilience. Strengthening renewable energy development alongside electrification is critical to avoiding future shocks and ensuring long-term sustainability,” Professor Raturi added.
ENDS