A timeline of how the fuel crisis impacted the Pacific

Analysis: During the fuel crisis, Pacific Island countries have scrambled to secure their own fuel supply, forcing them to lean on their wealthy neighbours and multilateral donors.

This triggered a region-wide economic slowdown and driven a managed, yet sharp, increase in fuel and electricity costs throughout the Pacific.

According to fuel price schedules released by Pacific governments regularly from February to June, Fiji has doubled the maximum price for diesel in urban centres in the main island, Viti Levu, such as Suva and Nadi.

Samoa has lifted its diesel ceiling by more than two thirds during that time, Tonga by more than 60 percent in Tongatapu.

And quite apart from asking for budgetary support, Pacific leaders, whenever they had the chance, appealed for help to build solar panels and other forms of renewable energy, in hopes of sidestepping a future calamity.

Iran begins its blockade of the Strait of Hormuz after taking heavy fire from US and Israeli forces. In the coming days, several Pacific-flagged tankers will be trapped, abandoned or damaged, and their crews injured or killed. The Palau-flagged Skylight is abandoned with two crew dead on March 1st. The Marshalls-flagged MKD Vyom is abandoned with one death on the same day, and the Safesea Vishnu is set ablaze ten days later, killing another.

It doesn’t take long before the public grows nervous of fuel and electricity price hikes. Pacific governments issue certain reassurances, but panic buying occurs in sporadic cases.

For Pacific Island countries, which are far away from the established oil refineries in Singapore and South Korea, it makes better economic sense to buy from bulk, rather than to have constant shipments. This means they have forward orders already secured.

So most retail prices are kept relatively stable as countries burn through their existing stocks. The import prices are going to go up, but the lag means they can bide their time.

But behind the scenes, governments are scrambling to secure supply from new sources – and to keep the public calm. It isn’t a question of if, but when.

Christopher Luxon touches down in Samoa. They discuss energy, but New Zealand isn’t committing to anything yet. They have their own crisis brewing. He’ll go to Tonga and say mostly the same thing.

The American Pacific and the free association states don’t have price ceilings, so their consumers are paying the market rate, plus the elevated travel costs. At a Mobil gas station in Saipan, petrol is USD$6.619 per gallon, and diesel $8.789. In Tinian, diesel is $10.

Pacific Island countries begin to raise their fuel price ceilings. Vanuatu raises diesel by 64 percent, but won’t raise it further for the indefinite future. In PNG the price is 73 percent higher, in Fiji it’s 35 percent, and in Tonga it’s 43.5 percent.

Tuvalu’s Energy Minister, Simon Kofe, appears on RNZ’s Morning Report and reveals that their fuel supply is “not assured” beyond June. Just days ago, Tuvalu had declared a state of emergency, allowing the government to take extraordinary measures to cut back on power usage. They’re experiencing rolling blackouts. The country spends more than a quarter of their GDP on petroleum imports.

In the Marshall Islands, government departments are shutting down at 3pm. They’re using their universal basic income to help consumers and adding a subsidy to their state-owned power company.

Marshall Islands Finance Minister David Paul will later reveal to RNZ Pacific that their singular supplier, ExxonMobil, is using force majure provisions in their supply contracts to balloon import prices.

Samoa and Solomon Islands both lift their diesel caps by 46 percent. Fiji and the Cook Islands climb as well. Fuel at the pump in Port Moresby is slashed by 42 percent after the government uses its windfall revenue from LNG exports, which have spiked dramatically in value, to subsidize consumer prices. Tonga cuts their electricity surcharge and reinvests more into welfare payments for pensioners. Pacific leaders are meeting.

Fiji’s Finance Minister defies an international travel ban for Ministers to go to Uzbekistan for an Asian Development Bank AGM. He walks away with a US$200 million loan in his pocket.

Meanwhile, Australia hands Fiji AUD$30 million. Foreign Minister Penny Wong calls it a “targeted budget support” to support Fiji’s efforts to be a regional fuel hub.

At this point, Anthony Albanese is in Southeast Asia, key points along the energy supply chain, trying to get Singapore, Malaysia and South Korea to give them preference if they have to make tough decisions over their own stocks. Wong says that they will keep the Pacific in mind, but they have to put themselves first.

New Zealand chips in NZD$8 million.

Pacific Islands Forum leaders officially invoke the Biketawa Declaration. It’s a framework for a regional crisis response, where leaders are compelled to come together, share their resources and expertise, and arrange some kind of plan together. It was last used during Covid pandemic.

Jeremiah Manele jumped the gun last month and said that they would, before any Pacific leaders, including Australia or New Zealand, could even consider it.

ADB Pacific Lead Emma Veve tells RNZ Pacific that help requests from Pacific Island governments have begun only recently. She calls this a credit to their resilience.

Help requests at this point have come from Solomon Islands, Vanuatu, Tonga, Samoa and Nauru. Veve says they have freed up hundreds of millions in both loans and grants. Support for each country will range from $10m to $100m, depending on their size.

Peace will appear on the horizon at the end of the month, but there’s no indication of it. By now Viti Levu’s diesel price ceiling has more than doubled since February. PNG’s fuel subsidy helped for a little while, but this month’s increase has exceeded last month’s decrease, and then some. Nauru and Niue, with their singular islands and tiny populations, have had to increase theirs, too.

Samoa triggers an “amber alert”, which would indicate they have less than 30 days of fuel stocks left in country. They deny this is the case, and just call it a “precautionary measure.”

Fuel price caps rise in the Cook Islands – diesel in Rarotonga hits NZ$3.84 per litre, and LPG hits $5.06 per kilo. In Aitutaki: diesel is $6.24 per litre. In New Zealand, diesel prices only ever briefly passed $4 in some rural areas.