Fijians should brace for higher prices amid Middle East crisis

The cost of doing business and the price of goods and services in Fiji could increase following a sharp rise in global oil prices, the Fiji Commerce and Employers Federation (FCEF) says.

FCEF chief executive officer Edward Bernard said the overnight spike in oil prices was already affecting global markets and could eventually impact Pacific economies, including Fiji.

“The price of a barrel of oil jumped up 29% and markets in major trading countries in Asia plummeted as a result. We are now seeing tangible impacts on markets which will ultimately affect the Pacific and Fiji,” Mr Bernard said.

Media reports indicate that Asian markets dropped immediately after the surge in oil prices, with the Australian ASX 200 reportedly losing more than $94 billion.

Singapore — the country through which Fiji sources its fuel — has already issued warnings to businesses and consumers about the possible economic impact.

Mr Bernard said businesses in Fiji must now take a cautious approach.

“Businesses must be vigilant in terms of investment decisions, employment considerations and ensuring fair prices for consumers. Government will need to urgently consider a financial support package for businesses, should the Middle East crisis prolong,” he said.

The spike in oil prices has been linked to disruptions in global oil supply following the closure of the Strait of Hormuz and attacks on refineries in the oil-rich region.

Mr Bernard said it was the first time in four years that oil prices had exceeded $100 per barrel.

Some analysts have warned prices could climb even higher.

“Some analysts argue we could see record oil prices above $150 a barrel, if the shutdown of the strait reaches end of March.”