Government acts early to manage risks from Global Fuel Market Volatility

The Solomon Islands Government has taken early and coordinated action to address emerging risks in global fuel markets driven by escalating geopolitical tensions involving Israel, the United States and Iran.

Cabinet recently received a strategic briefing outlining the potential impacts of developments in the Middle East on global oil prices and supply chains. 

The assessment, led by the Central Bank of Solomon Islands and the Ministry of Finance and Treasury, reinforced the country’s high exposure to external economic shocks.

Current data confirmed that Solomon Islands remains highly dependent on imported fuel, with 100 per cent of national transport and 98 per cent of electricity generation reliant on fuel imports. 

While domestic prices have remained stable under price-lock arrangements secured in December 2025, projections indicate that the effects of rising global market prices, alongside increasing shipping costs and insurance premiums, are likely to be felt by May or June 2026.

To maintain national stability, the Office of the Prime Minister and Cabinet (OPMC) has convened round table consultations with key government agencies, the Central Bank, and industry stakeholders across the energy sector. The Government reassures the public that fuel stock levels remain secure.

“As of March 2026, the collective domestic reserves from our two major importers, SPOL and Markwarth Oil, are between 60 to 90 days for diesel and petrol,” said Secretary to the Prime Minister – Special Duties, Sir Dr Jimmie Rodgers.

“Based on the round-table consultations with industry, we are now informed that our fuel supply route is relatively short, with tank rotation between Singapore and Solomon Islands through PNG occurring every three weeks. 

“This means that as long as the Singapore refinery maintains adequate stock, this rotation schedule will help ensure fuel supply security, allowing us to focus on managing pricing impacts for consumers,” Sir Dr Rodgers said.

“The Government’s focus is to stay ahead of these developments and minimise their impact on our people and businesses, through coordinated approaches, not only within Government Ministries and Agencies, but also with our local fuel distributors. 

“We are closely monitoring activity at the Singapore refining hub and along Pacific tanker routes to support timely and informed decision-making,” he added.

The Government for National Unity and Transformation is currently assessing a range of policy options to cushion the impact on households and businesses, including:

•         Fuel tax, fees relief to minimise the potential high   fuel prices throughout the nation
•         Strengthening strategic fuel reserves to ensure supply continuity
•         Accelerating the transition to renewable energy and alternative fuels to reduce long-term diesel dependency
•         Enhanced monitoring of global benchmark prices and shipping costs

These proactive measures reflect the Government’s commitment to strengthening economic resilience and safeguarding critical infrastructure in the face of global uncertainty.

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Ministry of Finance and Treasury/GCU statement