On the evening of March 31, majority of service stations in the Suva-Nausori corridor, at least, catered to queues of motorists lined up at the pumps in a rush for cheaper fuel ahead of the April 1 price reset.
On the eve of April 1, the country’s primary economic regulator – the Fijian Competition and Consumer Commission (FCCC), increased petrol prices in its latest determination, and that has since sparked intense debate and controversy surrounding what consumers, political parties and experts have suggested to be a sharp, unexpected hike, and an abandonment of the historic one-month lag methodology.
Members of the public had taken to social media expressing anger and deep skepticism.
A political party described the move as a “callous betrayal of the ordinary citizen”.
The Asia Pacific Regulatory Centre (APRC) criticised the timing of the determination, saying it deprived the government of a critical window to respond to the potential fuel crisis in a coordinated and measured way.
On Monday this week, in an exclusive interview with The Fiji Times, ANZ’s Sydney-based international economist Dr Kishti Sen joined in on the debate saying the April 1 prices that came after the March review should not have factored in the March rally crude prices, and instead should have been purely based off the February crude oil prices – based on the methodology the FCCC adopted for all its price reviews, except for this latest one.
Below is an excerpt of Mr Sen’s response to this newspaper in an email interview regarding FCCC’s latest price determination, which he said was “confusing” and suggested it may have utilised incorrect data or abandoned its long-standing one-month lag policy.
Interview excerpt:
Each month the FCCC undertakes a review of cost of petroleum products imported into the country.
Based on this price review, the regulator sets new prices to take effect from the first of the next (new) month.
Now, to estimate the cost of refined petroleum products imported in the country during any month, the FCCC would look at the Mean of Platts Singapore (MOPS which is a benchmark measure for all refined petroleum products) in that month.
Furthermore, it would add or subtract freight, refiner margins and FJD/USD movements over the month to determine new prices at the petrol pump stations at the beginning of each new month.
The most important driver of monthly price changes are MOPS prices as the rest of the influencers (freight, margins and currency) are steady from month to month.
Here’s the thing that is missed by many.
The MOPS prices are determined by the price of Brent Crude oil in the month prior.
Why month prior?
The answer lies in the way the crude oil market functions.
The typical crude oil market works as a ‘futures market’ as opposed to a spot market where you pay to take immediate delivery of oil.
The gold market is an example of a spot market where the current price of jewellery reflects its replacement cost, which, in turn is the ‘spot’ (current) price of gold in global markets.
In the futures market, the headline prices you see today are prices for delivery of oil sometime in the future.
It could be next month, the month after or several months later.
It is certainly not spot prices.
The most traded Futures Market for crude oil though is the front month (nearest expiry date) for futures contracts.
Hence, the best estimate of cost of petroleum products imported into the country in any month is the price of Brent crude in the month prior.
Because the price of Brent in the month prior actually reflects the prices that refiners have paid to take delivery of the crude oil in the current month.
And it is this price, they (refiners) would be passing onto importers, which subject to review, gets passed onto consumers in Fiji.
So, the March 1 prices should reflect the cost of petroleum products imported during the month of February, which, in turn, would incorporate the average price of Brent crude oil for the entire month of January 2026 (month prior).
That’s the lag structure.
A one-month lag structure.
It is a methodology that has served Fiji well over time.
Fast forward to the price reset for April 1, 2026.
In keeping with established methodology and historical price reviews, the April 1 prices ought to have reflected the cost of importing refined petroleum products into Fiji during the month of March.
As explained, the March costs should have been worked off the average price of Brent crude oil for all of February.
The average price of Brent in February was $US69 a barrel, up 7.2 per cent on the previous month (January 2026).
Such a rise would have delivered about a 7c/litre increase from April 1 at petrol stations in urban areas and slightly higher as you moved out of city centres and into regional and maritime islands.
Instead, prices rose by 21 per cent from $2.44/litre to $2.93/litre.
This 21 per cent is more in line with the 24 per cent increase in price of Brent crude over a seven-week period (that is, for all of February plus the first three weeks of March) over January.
The addition of three weeks of March prices is a surprise as the refiners in Singapore and South Korea, from where Fiji sources its products, would only be taking delivery of the higher (March) priced oil today and for the rest of April.
Hence, the March rally in Brent crude oil was expected to be factored into prices that came into effect on May 1 and not April 1.
Something seems amiss here.
The inference you can draw is twofold.
One is that inaccurate data has been fed into the models, and, two that there is a significant change in methodology of price determination which hasn’t been explained as yet.
April fuel price increase out of sync with corresponding Brent crude oil price rise. Picture: SUPPLIED / ANZ RESEARCH
April increase in fuel inconsistent with historical movements in the price of Brent crude oil. Picture: SUPPLIED / ANZ RESEARCH
Vehicles queue to fill up at the service station in Nabua, Suva on March 31 this year. Picture: WAISALE KOROIWASA
Vehicles queue at the service station in Nabua, Suva on March 31 this year. Picture: WAISALE KOROIWASA
