RISING global oil prices could place additional pressure on Fiji’s economy and household costs if the ongoing conflict in the Middle East continues to disrupt global supply.
Finance Minister Esrom Immanuel highlighted the concern, noting that oil prices had increased significantly from around US$60 per barrel last year to approximately US$84 per barrel today.
Meanwhile, the Ministry of Foreign Affairs has confirmed that no Fijian has been harmed in the Middle East. Mr Immanuel said the Government is closely monitoring the situation and assessing its potential economic and fiscal implications for Fiji.
“Projections indicate that if the conflict continues and global oil supply disruptions intensify, prices could rise further to triple digits,” he said.
“As a small island economy and a price taker in global markets, such increases would pose significant challenges for Fijian businesses, consumers and the broader economy.”
He said higher fuel prices will likely raise transportation and production costs while also increasing household expenses, placing upward pressure on inflation and the cost of living.
Mr Immanuel said weaker global economic conditions could further affect Fiji through reduced tourism demand, lower export demand and slower investment flows.
“We are particularly mindful of the potential impact on the tourism sector and national carrier Fiji Airways, as rising fuel costs and weaker global demand could affect travel and tourism activity.”
He said tourism remains a key driver of Fiji’s economy and any slowdown could have broader implications for economic growth, employment and foreign exchange earnings.
Mr Immanuel said the Government is also observing how the conflict could affect the economies of Fiji’s key trading partners, global stock markets and overall global economic stability.
“These developments will influence Fiji’s trade, tourism flows, investment and overall economic growth.”
