[Photo: FILE]

The Asia-Pacific Regulatory Centre is urging Pacific Island Countries, including Fiji, to prepare for economic pressures as global fuel prices surge amid escalating tensions in the Middle East.

The APRC says international oil prices have risen sharply following renewed military activity involving major powers and Iranian assets.

It further says that concerns over potential disruptions in the Strait of Hormuz, a key shipping route for about 20 percent of the world’s oil, have driven market volatility.

APRC says that even without actual supply disruptions, global oil markets are factoring in a geopolitical risk premium, which pushes prices higher based on anticipated instability.

APRC Senior Advisor, Joel Abraham, says the Pacific region must approach the current situation with strategic foresight.

“This is more than a fuel price hike. It can affect transport, electricity, food prices, construction materials, aviation, and the overall cost of living across the Pacific.”

He stresses that Pacific Island nations are highly vulnerable because they rely heavily on imported fuel and goods.

“Small island economies cannot set international energy prices. When global benchmarks rise, import-dependent nations feel the impact immediately.”

APRC has begun a regional analysis to assess potential effects, including rising fuel and diesel prices, higher maritime freight and insurance costs, volatile aviation fuel prices affecting tourism, increased food import costs, higher costs for construction and infrastructure, increased electricity tariffs in diesel-reliant grids, inflation impacts on essential goods and services and foreign exchange and fiscal pressures

Abraham warns that energy price increases often ripple through the economy.

“When oil rises, freight rises. When freight rises, the cost of imported goods rises. Small economies with limited buffers feel these effects quickly and strongly.”

APRC recommends a four-part preparedness plan for Pacific governments, including macroeconomic monitoring, targeted support, supply chain planning and energy resilience.

APRC will continue monitoring developments and provide updates to Pacific governments and regulators as needed.

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