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ANZ Senior Pacific Economist Dr Kishti Sen says during supply shocks, such as in 2022, it takes a while before initial crude oil price increases are reflected in the cost of petroleum products imported into the country.<\/p>\n
The world last experienced a major supply disruption and an oil price shock following Russia\u2019s invasion of Ukraine in 2022.<\/p>\n
Sen says using that as a guide, the immediate transmission from large increases in crude oil prices to refined product prices, such as fuel, was lower than suggested by history.<\/p>\n
In March of 2022, a month after Russia\u2019s invasion, Brent crude rose 19.5%. However, Sen says that the April 2022 review of the Fijian Competition and Consumer Commission, which would have incorporated this March uplift in prices, showed a more muted nine percent increase in petrol prices.<\/p>\n
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He adds that the largest increase came in July, when petrol prices rose 11.7% $3.44 a litre.<\/p>\n
However, Sen adds that the corresponding crude oil price rise was only 5.7%.<\/p>\n
Sen further states that transport constitutes 13.8 percent of Fiji\u2019s Consumer Price Index.<\/p>\n
However, he says that the weighting of the sub-expenditure categories is not available, so it is difficult to isolate the contribution of fuel price changes to overall weighted average CPI inflation.<\/p>\n
He highlights that it is important to note that fuel prices were $2.57 a litre in December of 2025, and for the first three months of the year have averaged $2.33 a litre.<\/p>\n
He stated that if fuel prices ease from August, as they predict, then their direct contribution to consumer prices will be fairly muted.<\/p>\n
Accordingly, Sen says they don\u2019t expect the Reserve Bank of Fiji to respond by making monetary conditions tighter to manage spending and demand.<\/p>\n
Central banks cannot do much to shift the dial on inflation caused by supply disruptions.<\/p>\n
Fiscal policy has more room to manoeuvre, he says.<\/p>\n
Sen further stated that if the conflict escalates and the duration of high crude prices is prolonged beyond their forecasts, then the state may consider removing 20 cents a litre fuel excise, as it did back in 2022, to provide some relief to motorists and ease the cost-of-living pressures.<\/p>\n