Opposition Member of Parliament Virendra Lal has warned that escalating tensions in the Middle East could significantly increase the cost of living in Fiji, as rising oil and freight prices begin to affect global markets.
Speaking in Parliament yesterday, Mr Lal said the ongoing conflict involving the United States, Israel and Iran had already pushed crude oil prices above $US100 ($F220) a barrel.
“Over the past week, we have observed significant geopolitical tensions within the Middle East,” Mr Lal said.
“The war involving the United States, Israel, and Iran, is already having a significant impact on world commodity prices.
“The price of crude oil has increased to over US$100 a barrel, and it is expected to keep rising amidst the uncertainty surrounding the prolongation of the war in the Middle East.”
He explained that a major concern was the disruption of global oil supply through the Strait of Hormuz, a critical maritime route for oil exports.
“At present, Iranian military has caused a closure of the Strait of Hormuz, essentially choking the global oil supply chain.
“Ships are therefore reluctant to pass through the Strait, as one oil tanker has already been struck by Iran.”
He warned that higher oil prices would trigger a ripple effect on freight, insurance and shipping costs, which would eventually be passed on to consumers.
“Since Fiji predominantly imports the bulk of its goods, and also most raw materials for goods that are manufactured locally, we will inevitably see prices of not just fuel, but all goods and services rise over the short term as a result of an increase in global freight rates.”
Mr Lal added that higher fuel costs would likely increase transportation and energy prices, placing additional pressure on businesses and households.
“The ordinary Fijian will inevitably end up paying more for almost everything, which is essentially a rise in the cost of living.”
He urged the Government to consider measures to cushion consumers from the expected price increases.
