Reliant on imported fuel, Pacific islands appeal for help as oil prices surge

The leaders of some Pacific countries have appealed for help with oil supplies while others urge against “panic buying” as the import-reliant nations grapple with fears over possible fuel shortages and escalating costs caused by war in the Middle East.Oil prices have surged to nearly $110 a barrel after strikes against energy infrastructure in Iran and the Gulf States.“Pacific island nations are especially vulnerable to fuel supply disruptions and rising costs because [most countries] rely almost entirely on imported fuel,” Paul Barker, executive director at the Institute of National Affairs in Papua New Guinea, said.“Many of these economies are relatively weak, with limited purchasing power and strong reliance on remittances and foreign aid, leaving them exposed to global price shocks,” Barker said.He added that higher fuel costs threaten key industries such as tourism and “make delivering basic government services to remote islands increasingly difficult”.In Samoa, about two-thirds of the country’s energy generation comes from imported diesel fuel.Speaking after a meeting with the New Zealand leader, Christopher Luxon, the Samoan prime minister, La’aulialemalietoa Leuatea Schmidt, said he had asked if it was possible to divert fuel to his country in case of crisis.“We don’t know what’s going to happen next,” La’aulialemalietoa said.He said Samoa secured its fuel supply from Singapore and other nations, but had asked Luxon to help “cover us in case something happened”.And in Tonga, where 80% of its energy generation comes from imported diesel fuel, the prime minister, Lord Fakafanua, said New Zealand and Australia were “sharing intelligence” with his country to help them best prepare for shortages.“What we can do is prepare as best we can, and part of that is the sharing of intelligence with our partners such as Australia and New Zealand. My concern is about ensuring that we have enough energy for the country,” he said, adding that “for now we seem to be OK”.Tourism makes up 25% of Samoa’s GDP and 11% in Tonga, raising concern for countries heavily reliant on airlines that are facing huge cost pressures due to the price of jet fuel.In Papua New Guinea, petrol, diesel and kerosene prices have increased. The country, with a population of about 10 million, is a liquefied natural gas exporter but it still imports refined fuel, leaving domestic prices exposed to the global oil shock.The petroleum minister, Jimmy Maladina, said the government was working with suppliers to ensure fuel keeps flowing in the coming months.“Our biggest concern in PNG is storage capacity,” Maladina said this week, adding the government is monitoring the situation and will act if needed.In the capital Port Moresby, businesses have felt the impact of higher fuel prices.Janet Sios, part owner of Paradise Private hospital, said rising fuel costs have driven up the price of food and services and the situation is expected to worsen in the coming weeks. “There is less fuel available, and that is increasing costs across the board. Another price increase is expected in April [by authorities in PNG] so people need to start factoring in higher transportation costs,” she said. Sios said the cost of medicines has risen due to higher freight and supply costs. She said business owners in the country “must be prepared for conditions to worsen over the next few months”. In Fiji, the government said in a statement on Tuesday there was “no need for panic buying or stockpiling”. It said the country has sufficient fuel stocks, with reserves ranging between 20 and 45 days depending on the product.Fiji has a population of just under 1 million. The government called on people to “avoid unnecessary stockpiling” of fuel as it warned of supply impacts.“Panic buying can place pressure on supply systems and may lead to temporary shortages at service stations,” it said.In its most recent update, the Solomon Islands government reassured residents on 8 March that current fuel shipments to the country remained on schedule. The prime minister said in a press conference the country had about 20 to 30 days of fuel supply available, and the situation was being closely monitored.Agence France-Presse contributed to this report