SOLOMON Islanders have been warned to expect higher fuel and electricity costs as the US and Israel war against Iran enters its third week.
The Central Bank of Solomon Islands said its preliminary assessment indicated that sustained increases in global oil prices would push up domestic fuel costs.
This the central bank said, would affect electricity tariffs.
“Current average retail fuel prices at Honiara pump stations stand at SBD9.38 per litre, and the impact of the oil price shock is expected to begin filtering through to domestic prices from April 2026 onwards,” the bank said in a statement.
“Historical experience shows that domestic prices in Solomon Islands are highly sensitive to global energy shocks,” it added.
The bank said that at the height of the Russia–Ukraine War in 2022, Brent crude oil peaked at around $USD120 per barrel, causing average retail fuel prices in Honiara to surge by 32 per cent to a record $SBD14.47 per litre.
“Electricity tariffs also increased by up to 10.7 per cent, reflecting the direct pass-through of higher global fuel costs to domestic energy prices.”
It has warned of a similar effect on local prices at the fuel pump if the current conflict in the Middle East persists.
The scale of the impact is likely to depend largely on the duration of the current conflict and ways in which fuel supplies are affected.
Source: Indepth Solomons