Higher domestic prices for fuel, fruits and vegetables are likely in the coming months, Attorney-General and Minister for Economy, Aiyaz Sayed-Khaiyum, told Parliament yesterday.

But prices are expected to plummet by September or October, he said.

His comments were made following the global economic impact of the unprovoked war that Russia launched against Ukraine.

“Fiji has already begun to experience the spill-over effects of these trade shocks, with imported inflation pushing up domestic fuel and food prices in recent months,” he said.

“Fiji is particularly susceptible to fuel price shocks, given that fuel accounts for roughly one-third of our total import bill.”

Factors
Domestic fuel prices depend on three factors:
– the world market price for refined oil, benchmarked by the Mean of Platts Singapore (MOPS) international freight rates and foreign exchange rates.

– refinery margins,

– distribution costs,

– insurance freight, and

– transport costs.

Geopolitical pressures also influence the direction of international fuel prices in any given month.

“Over the next few months, domestic prices are expected to rise further because of fruit and vegetable shortages due to TC Cody related flooding, and global food and fuel supply disruptions due to the Russia-Ukraine war.”

Unprecedented Rebound
Fiji’s Gross Domestic Product is poised for unprecedented rebound, Mr Sayed-Khaiyum said.

“A lot of these can be tampered with in respect of what will happen with the pricing,” he said.

“That is why we put in place the Revised Budget on the 21 items, which is unprecedented.

Fuel that is imported into Fiji is imported by the three fuel companies – Pacific Energy, Total and Mobil – and they come from Singapore.

While shipment is regular, Fiji does not have the capacity for storage for months on end, Mr Sayed- Khaiyum said.

“We need to build large scale investments,” he said.

“The issue at the moment in the world is not shortage per se, but the pricing because some certain supply chains have been affected.”

“It is just that people are not releasing it on time or trying to get a bigger price.”

Adjustment
Mr Sayed-Khaiyum said adjustments would have to be made.

“I hope that the war is not going to last for too long, but there is a possibility, it could last for a long period of time.

“I think there would also be some adjustments made.

“I think a lot of the world is in fact reeling from the fact in this modern day and age, how can a country go and invade another country, or try to invade, which is unprovoked.”

Wheat
Mr Sayed-Khaiyum said the agriculture sector was experimenting with the production of as much as 25 per cent of cassava flour or cassava mill in normal flour.

“These are alternatives,” he said.

“What we can do individually is change in our own lives, rather than saying what is the Government going to do about it.”

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