NEWS

Fuel Prices to Fall in 2023: RBF Chief

Pandemic-related disruptions also will cease further and alternative suppliers for Ukraine and Russian products will enter the market
07 Jul 2022 10:30
Fuel Prices to Fall in 2023: RBF Chief
Reserve Bank of Fiji.

The Governor of the Reserve Bank of Fiji, Ariff Ali, says the price of fuel will drop from next year.

Mr Ali said fuel price inflation would start moderating from next year because the global supply chain disruptions and demand and supply mismatch were projected to dissipate.

He said pandemic-related disruptions also would cease further and alternative suppliers for Ukraine and Russian products would enter the market.

 

“Pandemic was the beginning of the recent high inflation as lockdowns disrupted global supply chains, which was then further, amplified by the Russian invasion of Ukraine,” he said.

“It resulted in higher prices and shortage of certain products also led to inward-looking policies by some countries, which worsened the situation.”

“While Fiji is far from the Russia-Ukraine conflict, we still feel its implications as we live in an interconnected world.”

 

He said the ban on Russian oil after the war made the situation worse and culminated in a steady rise in fuel prices over the last few months, across the globe.

“Reason for the rise in fuel price is also multifaceted. When the pandemic started, OPEC+ reduced output to reflect the decline in demand,” he said.

“However, as demand picked up once the global economy started recovering, the crude oil
supply did not rise at the same speed.

“Later on, the ban on Russian oil after the war made the situation worse and culminated in a steady rise in fuel prices across the globe.”

 

“While there is no clear indication of when the war in Ukraine will end, food and fuel price inflation is expected to start moderating from next year.”

He said the flow-on effect of higher fuel prices to domestic prices is inevitable, Government can cushion the impact to some extent by lowering duties.

But, he said this will affect government revenue and increase government debt further, the ideal solution therefore is to provide targeted assistance to the poor and vulnerable only.

 

Feedback: nacanieli@fijisun.com.fj



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