Consumers can expect a noticeable reduction in fuel prices over the next few months as global oil prices continue to decline, according to Reserve Bank of Fiji Governor Ariff Ali.
Speaking on the outlook for fuel costs in Nadi this morning, Ali said international oil prices have fallen significantly from their recent highs, providing relief for fuel-importing countries such as Fiji.
“The fuel price has fallen from a peak of about US$110 per barrel to just below US$80, somewhere around US$79 per barrel,” he said.
However, Ali cautioned that consumers should not expect an immediate drop in prices at the pump because of the way fuel purchases and deliveries are structured.
“What people need to understand is that the price of US$79 or US$80 being quoted now is for fuel that will be supplied in August. It is not something that our fuel retailers will immediately benefit from,” he explained.
Ali said there is a lag between international price movements and the fuel that eventually reaches Fiji due to purchasing arrangements and shipping times.
“Once that fuel is supplied a few months down the line, and then you add the additional couple of weeks required for it to be shipped to Fiji, we will likely see some reduction in fuel prices in August and maybe a bigger reduction in September,” he said.
The Governor said the decline in oil prices is encouraging and could bring welcome relief to households and businesses facing high transport and operating costs.
“Oil prices are falling from US$110 to just below US$80. I just hope the market remains positive and that prices continue to go down.”
While he does not expect prices to return immediately to levels seen before global geopolitical tensions pushed energy costs higher, Ali said the current trend is moving in the right direction.
“We may not go back to the levels prior to the war straight away, but at least for now we should expect a substantial reduction in prices over the next three months, although not immediately,” he said.
