Fiji businesses brace for rising fuel costs
Small and medium-sized enterprises (SMEs) across Fiji should prepare for higher operating costs, as a surge in global oil prices is expected to push up local fuel prices in the coming months.
Fuel prices in Fiji are regulated under the Fijian Competition and Consumer Commission Act 2010 and administered by the Fijian Competition and Consumer Commission (FCCC). While retailer profit margins are fixed, fluctuations in global input costs are passed through to consumers following a monthly review.
This system means there is a one-month lag between global price movements and what businesses pay at the pump.
April increase likely
ANZ Senior Pacific Economist Kishti Sen and Commodity Strategist Soni Kumari suggest that unleaded petrol prices in urban areas will rise by around 7 cents per litre to approximately FJD2.51 per litre from April 1. This reflects a 7.2% increase in Brent crude oil prices during February, partially offset by a slightly stronger Fijian dollar.
However, the more significant concern for business owners lies ahead with ongoing tensions in Iran and oil-producing regions. The sharp rally in oil prices during March is expected to feed into the FCCC’s April review, potentially resulting in a much steeper increase from May 1.
Sen and Kumari estimate that fuel prices could jump by as much as 19 cents per litre—around a 7.6% increase—pushing petrol costs to roughly FJD2.70 per litre.
Why the spike matters for smes
For SMEs, particularly those in transport, logistics, retail, agriculture, and tourism, fuel is a core operating expense. A sustained rise in fuel prices can quickly ripple through supply chains, increasing delivery costs, raising input prices, and squeezing already tight margins.
The Fiji Commerce & Employers Federation (FCEF) has also warned of an increase in the cost of doing business and cost to good and services, amidst the increase in oil prices.
Businesses that rely heavily on transportation—such as delivery services and wholesalers—may feel the impact first. However, secondary effects are likely to spread across the broader economy, potentially increasing the cost of goods and services.
Global uncertainty driving prices
The recent surge in oil prices has been driven by global supply concerns, including ongoing uncertainty around shipping flows through key routes such as the Strait of Hormuz. Brent crude oil prices have averaged significantly higher in March and are expected to remain elevated in the near term.
Despite this, historical patterns suggest that sharp increases in crude oil prices do not immediately translate into equivalent rises in retail fuel prices. During the 2022 global oil shock following the Russia’s invasion of Ukraine, petrol prices in Fiji rose more gradually, with the largest increases occurring months after the initial spike in crude prices.
This lag effect offers some short-term predictability for businesses but also means that cost pressures can persist even after global prices begin to stabilise.
Policy relief possible but not guaranteed
Sen and Kumari suggest some relief could be presented. The Fiji government has previously intervened to ease cost pressures, including temporarily reducing fuel excise by 20 cents per litre in 2022.
Such fiscal measures remain an option, particularly if high oil prices persist and begin to significantly impact the cost of living and business activity.
What businesses can do now
With fuel prices expected to rise in both April and May, SMEs are encouraged to review their cost structures and consider mitigation strategies. These may include optimising delivery routes, consolidating shipments, renegotiating supplier contracts, or passing on some costs to customers where feasible.
While forecasts suggest fuel prices could ease later in the year, the near-term outlook points to increased pressure on operating expenses—making proactive planning essential for business resilience.
Related
The Fiji Fuel Retailers Association (FFRA) is urging motorists to remain calm and avoid panic buying, warning that unnecessary stockpiling of fuel could create shortages and disrupt essential services. The association says speculative buying could turn a manageable situation into a crisis by placing pressure on fuel supply chains.
“Stockpiling will lead to an artificial crisis, potentially turning a manageable situation into a real shortage,” the FFRA said in a recent statement.
Meanwhile the Fiji Government says the country has sufficient fuel supplies and there is no need for panic buying.
“Fuel supply in the country is sufficient to meet the energy needs for the next few months and there is no need to indulge in ‘panic buying’ at the service station,” a government statement says.
Australia’s Qantas Airways and Air New Zealand said this month that they are hiking fares due to the Middle East conflict, underscoring how global airlines are struggling to cope with the sudden and soaring costs of fuel.
Reuters reports that jet fuel prices, which were around US$85 to US$90 per barrel prior to the conflict, have increased sharply to between US$150 and US$200 per barrel in recent days, New Zealand’s flag carrier said as it suspended its financial outlook for 2026 due to uncertainty over the conflict.
