As the Fijian Competition and Consumer Commission welcomes reports of the United States and Iran reaching an agreement that could see the reopening of the Strait of Hormuz, they are urging consumers and businesses to remain cautious, avoid assuming that immediate reductions in fuel and LPG prices will follow, and refrain from making financial decisions based on expectations of immediate price reductions.
FCCC CEO Senikavika Jiuta says the announcement was encouraging news for both the global economy and Fiji, but any impact on domestic fuel prices would take time to flow through the pricing system.
She says the disruption affected far more than the physical movement of oil.
Jiuta says when the Strait of Hormuz was disrupted, the impact went beyond oil supplies alone.
She says shipping routes changed, insurance costs increased, freight rates rose, and buyers looked to alternative markets, all of which contributed to higher fuel costs across the global supply chain.
The CEO says Fiji's regulated fuel pricing methodology operates with an approximate two-month lag.
Jiuta says the prices reviewed today are based on international fuel procurement costs, freight rates, and other market factors from previous months.
She says any sustained reduction in international fuel prices resulting from this agreement would most likely be reflected in Fiji over future pricing review periods.
She explains that this lag helps ensure fuel prices reflect actual market costs rather than short-term volatility or speculation.
Jiuta says international refineries, including those supplying fuel into the Singapore market used as Fiji's benchmark, continue to hold inventory purchased when oil prices were significantly higher.
She says any improvement in global fuel market conditions will take time to flow through, as the region will first need to restore normal shipping patterns, rebuild market confidence, and reduce the elevated insurance and freight costs that emerged during the recent period of uncertainty.
FCCC says during the conflict, concerns regarding the security of shipping routes through the Strait of Hormuz contributed to increased freight charges, higher insurance premiums, and market volatility.
They say these costs ultimately flowed through to international fuel prices and affected importing countries, including Fiji.
As with all fuel and LPG reviews, FCCC will continue to assess international refined fuel prices, LPG contract prices, freight rates, insurance costs, and foreign exchange movements in accordance with the established pricing methodology.
FCCC also confirmed that its Fuel Monitoring Taskforce will continue monitoring not only fuel and LPG traders but also the wider market to ensure that recent global events are not used as a basis for unjustified price increases.
Jiuta says periods of uncertainty require fairness from both businesses and consumers.
She says when difficult times arise, we must remember that we are all in the same boat. Most businesses do the right thing, but no one should seek to unfairly profit from uncertainty at the expense of Fijian consumers.
She says FCCC will continue to closely monitor the market and where price increases cannot be justified by genuine cost movements, they will not hesitate to investigate and take appropriate action.
Jiuta adds the Commission remains committed to protecting consumers while ensuring businesses can continue operating in a fair and competitive environment.
