The Pacific region, already on the front lines of the climate crisis due to rising sea levels and increasing natural disasters, now faces a new fossil-fuel-based vulnerability: the fuel crisis caused by the war in the Middle East. The reliance of island countries and territories on imported oil is expected to hinder economic growth and fuel inflation, with shortages already affecting the price of cassava, school transportation costs, and business profits.
Fuel Price Shock Hits Fijian Drivers
When 53-year-old Agbar Mohammad pulled into a petrol station in Fiji in May, he anticipated a queue but found it nearly empty. "I could only see one or two cars at the service station, which was very unusual," Mohammad says. The reason became clear as he filled his car: the numbers on the fuel pump climbed much faster than the needle on his dashboard. Normally, he would put in about $40 of fuel, but this time $100 barely got his 60-litre tank halfway full.
High Dependence on Imported Oil
Dr. Rubayat Chowdhury from the Australian National University explains that Pacific Islands are highly dependent on imports for food and basic necessities. In a region that earns significantly from tourism, remittances, and foreign aid, higher fuel prices will not only raise the cost of goods but also threaten incomes. "The Pacific will be hit hard," says Chowdhury, citing two main reasons: its remoteness and small populations.
In 2023, oil accounted for more than 80% of the region's energy supply, with over half used for transport and more than a third for electricity. At least eight Pacific countries generated more than half of their electricity from oil products in 2024, including over 90% in Solomon Islands and more than 80% in Tonga and Nauru. In contrast, Australia and New Zealand derived only 2.3% and 1.5% of their electricity from oil products in 2024, mostly from small, intermittent, or temporary sources.
Renewable Energy Targets and Import Reliance
Many Pacific countries aim to generate 100% of their electricity from renewables by 2030. While some, like Tokelau, have already achieved this, most have not. Oil products accounted for about 20% of all imports for some Pacific countries in 2019, but many also import large quantities of food and other staples that cannot be produced locally. Data from the UN shows that in 2021-23, food made up over 20% of net imports in Samoa and Tonga, and over 29% in Kiribati.
Government Responses and Regional Support
Pacific countries are taking action before oil supply shortages worsen. Fiji's parliament voted for a 20% pay cut for its members due to budget pressure from the global fuel price shock. Other countries have repeatedly hiked fuel prices while introducing relief for businesses and residents. To enhance fuel security, the Australian government has announced $30 million in support for Fiji, including a supply and storage hub in the region. Fiji's prime minister, Sitiveni Rabuka, stated this would support the national budget as Fijians brace for another fuel price increase.
Concentration of Fuel Sources
Guardian Australia analysis of global trade flows in 2024 found that Pacific countries receive most of their fuel from just one of a handful of countries: Singapore, Malaysia, South Korea, and China. Some Pacific countries source 80%, 90%, or more of their oil products from their largest supplier. This concentration could leave them exposed if suppliers prioritize their own domestic markets. Australia has already been warned that Malaysia or South Korea might need to do so if the crisis continues.
Dr. Chowdhury notes that Australia is relatively protected from an oil supply shock due to its purchasing power and status as one of the world's largest producers and exporters of liquefied natural gas. "It's relatively easier for bigger nations like Australia to negotiate, right? To reach out to Brunei, for example, to secure the oil supply. It's not easy for Solomon Islands or the Federated States of Micronesia to do the same."
Impact on Daily Life
For Agbar in Suva, the fuel crisis has meant working longer hours to break even. Bus operators face tighter margins, and farmers from provinces like Tailevu, Naitasiri, and Ra pay more just to get produce into town. For fellow driver Gerald Elaisa, every trip now comes with calculation. "We only buy fuel for the important runs – school, work, home," he says. "The children now catch the bus or walk. We are cutting down on unnecessary spending." For many Fijian families, fuel is no longer just filling their tanks; it is shaping how they live.
