Fuel price timing raises policy concerns, says expert

The recent fuel price adjustment in Fiji has raised concerns not about the increase itself, but about its timing, with a regional policy expert warning that the early pass‑through of global fuel shocks has reduced Government’s room to respond.

Asia‑Pacific Regulatory Centre (APRC) executive director Joel Abraham said global fuel price increases were unavoidable given escalating geopolitical tensions and volatility in international oil markets, particularly for an import‑dependent country like Fiji.

Mr Abraham, the former Fijian Competition and Consumer Commission (FCCC) chief executive officer, said the key issue was the timing of how these global shocks were passed through to the domestic economy, noting that discipline in timing is as important as pricing accuracy during periods of instability.

“What matters in regulation is how these global shocks are transmitted into the domestic economy, and when,” Mr Abraham said.

“There are moments in a nation’s economic life when the issue is not the price itself, but the timing of its arrival.”

Mr Abraham said Fiji’s fuel pricing framework has traditionally included a built‑in lag period, typically around two months, between movements in international benchmark prices and domestic price adjustments. This lag, he said, was an intentional stabilising feature rather than a technical delay.

“The lag creates a buffer against immediate volatility, provides space for businesses and households to adjust and, most importantly, gives government time to respond deliberately rather than reactively,” he said.

The FCCC announced fuel price increases late Tuesday night, taking effect the next morning on April 1, despite earlier assurances by Prime Minister Sitiveni Rabuka and Minister for Finance Esrom Immanuel that no increase was expected until May.

Asia‑Pacific Regulatory Centre (APRC) executive director Joel Abraham.

Photo: Supplied

Timing shock

Under normal circumstances, the current surge in global prices would have been expected to meaningfully affect domestic fuel prices closer to May.

However, the inclusion of more recent international price data, particularly from late March, effectively brought forward the full impact on consumers and businesses.

Mr Abraham said this compression of timing removed a valuable policy window that government could have used to coordinate fiscal, regulatory and social protection responses.

“The issue is not whether prices should increase — they must, given global conditions,” he said.

“The issue is that the timing of this increase removed a critical window that Government has to respond in a coordinated and measured way.”

He said the earlier‑than‑expected price transmission has real economic consequences, including immediate cost escalation for businesses, accelerated inflationary pressures and increased cost‑of‑living stress for households.

An early shock also reduces the effectiveness of government interventions by limiting preparation time across ministries, regulators and industry stakeholders.

Mr Abraham acknowledged that the Government had moved early to address the risks associated with global fuel volatility, including high‑level engagement on fuel supply security, cabinet‑level coordination and consultation with technical experts.

“This is what good governance looks like: anticipation, coordination and intent,” he said.

However, he warned that regulatory decision‑making also requires judgement, particularly during periods of global uncertainty.

“It is important to be clear: fuel pricing is not a purely mechanical exercise,” Mr Abraham said.

“Yes, it relies on data, formulas and benchmarks, but it also requires judgement, particularly in periods of global instability.

“The choice of which data to include, and when, is not neutral. It is, in effect, a policy decision.”

Judgement matters

He said overly rapid pass‑through of global price movements can amplify short‑term economic stress and shift the economy from managed adjustment into reactive shock.

“Speed is not always prudence,” Mr Abraham said.

“In moments like this, discipline in timing is as important as accuracy in pricing.”

Mr Abraham said the situation signals the need to strengthen Fiji’s fuel price management framework to better withstand global shocks.

He said APRC is currently supporting the Government on the design of a Fuel Shock Response Framework, which would introduce defined trigger points, pre‑agreed policy responses and price‑smoothing mechanisms during periods of extreme volatility.

Such a framework, he said, would ensure shocks are absorbed strategically rather than transmitted abruptly.

Ultimately, Mr Abraham said the broader issue goes beyond fuel prices to economic resilience.

“We cannot control global events,” he said. “But we can control how those events are transmitted into our economy. That is where resilience is built.”