Don't expect fuel price cuts yet, FCCC warns

Fijians hoping for relief at the pump have been told not to expect immediate reductions in fuel and LPG prices, despite international reports of a peace agreement between the United States and Iran.

The Fijian Competition and Consumer Commission (FCCC) has welcomed reports that the two countries have reached a peace agreement, which could eventually lead to the reopening of the Strait of Hormuz and ease pressure on global energy markets.

However, FCCC is urging consumers and businesses to remain cautious and avoid making financial decisions based on expectations of immediate fuel price reductions.

FCCC chief executive officer Senikavika Jiuta said while the development was encouraging, any benefits would take time to filter through to Fiji.

"When the Strait of Hormuz was disrupted, the impact went beyond oil supplies alone. Shipping routes changed, insurance costs increased, freight rates rose, and buyers looked to alternative markets, all of which contributed to higher fuel costs across the global supply chain," Ms Jiuta said.

She said Fiji's fuel pricing system was based on international costs from previous months.

"Fiji's regulated fuel pricing methodology operates with an approximate two-month lag. The prices reviewed today are based on international fuel procurement costs, freight rates, and other market factors from previous months. Any sustained reduction in international fuel prices resulting from this agreement would most likely be reflected in Fiji over future pricing review periods."

Ms Jiuta said international refineries supplying fuel to the Singapore market, Fiji's pricing benchmark, were still holding fuel stocks purchased when oil prices were significantly higher.

"Any improvement in global fuel market conditions will take time to flow through, as the region will first need to restore normal shipping patterns, rebuild market confidence, and reduce the elevated insurance and freight costs that emerged during the recent period of uncertainty."

The FCCC said it would continue monitoring international fuel prices, freight rates, insurance costs and foreign exchange movements as part of its regular fuel and LPG reviews.

The commission also confirmed that its Fuel Monitoring Taskforce would continue monitoring fuel and LPG traders, as well as the wider market, to prevent unjustified price increases linked to recent global events.

"When difficult times arise, we must remember that we are all in the same boat. Most businesses do the right thing, but no one should seek to unfairly profit from uncertainty at the expense of Fijian consumers," Ms Jiuta said.

"FCCC will continue to closely monitor the market. Where price increases cannot be justified by genuine cost movements, we will not hesitate to investigate and take appropriate action."

Ms Jiuta said the commission remained committed to protecting consumers while ensuring businesses could continue operating in a fair and competitive environment.