New analysis by Zero Carbon Analytics has warned that the ongoing Middle East conflict could significantly increase Fiji’s fuel costs and expose the country to heightened economic risks.
“Conflict in the Middle East risks pushing Pacific Island Countries into an energy crisis, as around 80 per cent of their energy relies on imported oil products,” the report states.
For Fiji, the impact could be severe, with the analysis showing the country’s annual refined fuel import bill could rise by US$670 million — a 115 per cent increase from 2025 levels.
“The increased bill equates to nearly three times Fiji’s annual healthcare budget,” the report said.
The surge is linked to rising global oil prices, with Brent crude exceeding US$100 per barrel amid disruptions to supply routes, particularly through the Strait of Hormuz.
Zero Carbon Analytics warned that such increases could significantly weaken Fiji’s financial position.
“Our analysis shows that [Fiji’s] import cover ratio could fall from 5.8 months to 3.4 months if current refined oil prices persist for a year,” it said.
The report highlighted Fiji’s continued reliance on imported fuel, noting that diesel still accounts for about 49 per cent of electricity generation — despite being one of the most expensive energy sources.
“Pacific Island Countries have the highest diesel use for power generation worldwide,” the analysis noted.
The economic implications extend beyond energy, with key sectors such as tourism also at risk. Tourism Fiji has already moved to strengthen coordination through its Tourism Action Group in response to the unfolding crisis.
Despite contributing just 0.03 per cent of global greenhouse gas emissions, Pacific nations — including Fiji — have set ambitious renewable energy targets, aiming for 100 per cent renewable electricity by 2035.
The report stressed that the current crisis underscores the urgency of transitioning away from imported fossil fuels.
“Disruptions to fossil fuel markets highlight the need… to turn to alternative energy sources, particularly renewables, to reduce exposure to volatility and lower costs,” it said.
However, progress remains slow, with solar accounting for less than one per cent of Fiji’s electricity output in 2024.
Analysts say accelerating investment in renewable energy and electrification will be critical to improving Fiji’s energy security and cushioning the economy against future global shocks.
