FORMER Finance Minister and Member of Parliament Professor Biman Prasad say rising global fuel costs pose wider economic risks for Fiji, beyond concerns over supply.
“The long-term risks are really not only about just running out of fuel,” said Prof Prasad said.
“The concerns would also be about imported inflation, possible pressure on foreign reserves, higher shipping and freight costs.
“All these could lead to weaker business confidence, and reduced household purchasing power. Fiji’s tourism, transport, agriculture, fishing, construction, and electricity systems all feel the pass-through effects of higher fuel costs. It is always the case that fuel price increases can very quickly feed into domestic costs even when supply itself remains available.”
He said Fiji must improve its fuel security framework and reduce reliance on imports over time.
“In the medium to long term Fiji will have to find ways for better fuel reserve capacity and the stock holding requirements. We could also look at diversifying our procurement and supply chain routes.
“In the longer term we have to accelerate the transition to renewable sources of energy as stated in the National Development Plan.
“We also need to invest more seriously in public transport infrastructure and improve maritime logistics efficiency so that the economy generally uses less fuel in the total output of the economy.”
He said Government could not fully shield citizens from rising costs.
“So, my overall assessment is that our economic fundamentals remains strong and with the right mix of policies we will be able to ride through this crisis.”
