ANZ Senior Pacific Economist Dr Kishti Sen says during supply shocks, such as in 2022, it takes a while before initial crude oil price increases are reflected in the cost of petroleum products imported into the country.

The world last experienced a major supply disruption and an oil price shock following Russia’s invasion of Ukraine in 2022.

Sen says using that as a guide, the immediate transmission from large increases in crude oil prices to refined product prices, such as fuel, was lower than suggested by history.

In March of 2022, a month after Russia’s invasion, Brent crude rose 19.5%. However, Sen says that the April 2022 review of the Fijian Competition and Consumer Commission, which would have incorporated this March uplift in prices, showed a more muted nine percent increase in petrol prices.

He adds that the largest increase came in July, when petrol prices rose 11.7% $3.44 a litre.

However, Sen adds that the corresponding crude oil price rise was only 5.7%.

Sen further states that transport constitutes 13.8 percent of Fiji’s Consumer Price Index.

However, he says that the weighting of the sub-expenditure categories is not available, so it is difficult to isolate the contribution of fuel price changes to overall weighted average CPI inflation.

He highlights that it is important to note that fuel prices were $2.57 a litre in December of 2025, and for the first three months of the year have averaged $2.33 a litre.

He stated that if fuel prices ease from August, as they predict, then their direct contribution to consumer prices will be fairly muted.

Accordingly, Sen says they don’t expect the Reserve Bank of Fiji to respond by making monetary conditions tighter to manage spending and demand.

Central banks cannot do much to shift the dial on inflation caused by supply disruptions.

Fiscal policy has more room to manoeuvre, he says.

Sen further stated that if the conflict escalates and the duration of high crude prices is prolonged beyond their forecasts, then the state may consider removing 20 cents a litre fuel excise, as it did back in 2022, to provide some relief to motorists and ease the cost-of-living pressures.

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