Strategic Buffers: Solomon Islands Deploys “Smoothing” Mechanism To Blunt Global Fuel Shock

The Solomon Islands Government has confirmed a fuel price increase announced today by the Price Advisory Committee (PAC), with new prices taking effect immediately. 

This increase was one of the options alluded to in our earlier Press Release of 26 March 2026.

The adjustment reflects a sharp rise in the price paid by our two fuel importers – South Pacific Oil Limited (SPOL) and Markwarth Oil since the beginning of March 2026 as a result of the increase in international fuel prices, driven by ongoing tensions in the Middle East. 

Global oil prices have increased from below USD $70 per barrel before the conflict to over USD $100 per barrel during the first week of the conflict and have remained  above USD$100 per barrel ever since. 

Fuel prices in Solomon Islands  are typically adjusted every two months with each new monthly price based on the price of fuel two months earlier. However, the scale of the increases paid by our importers since the beginning of March 2026 due to the  scale of recent global price increases have necessitated the PAC to adopt a strategy to smooth out the price increases aimed at preventing huge monthly jumps on fuel pricing going forward.

The Gazetted maximum fuel prices are as follows (S.I. cents per litre):

The new increase has not yet  incorporated the fiscal measures approved by the Cabinet to cushion the impact of the global price increases on the domestic market. These measures have now been Gazetted, and they will be incorporated into the fuel price adjustments expected in the first week of May 2026. 

The details of these measures will be shared by the Prime Minister at his Press Conference later this week – but they include various forms of fuel tax relief and other measures to reduce the consumption on fuel supply.

The smoothing mechanism applied by the PAC together with the incorporation of the Gazetted Government Fiscal Measures will help ensure that the next fuel price adjustment in early May should be minimal compared to the current rate of increase. This will provide more confidence to businesses ,other consumers and households.

The Government is also working closely with the Solomon Islands Chamber of Commerce and Industry to address the broader impact of rising costs on businesses and the economy, and a meeting with SICCI is scheduled to occur tomorrow morning to hear from SICCI of their major concerns and work with them on common solutions.

Our fuel importers have confirmed that fuel supply remains stable, with sufficient stocks available from our main off-shore supplier for at least the next six months. Fuel shipments are expected to continue arriving regularly every three to four weeks.

In addition to immediate measures, the Government is progressing longer-term solutions to reduce reliance on imported fuel. These include:

• strengthening fuel price controls in provinces and rural areas
• supporting the transition to solar and other renewable energy sources
• promoting energy conservation measures nationwide

The Government noted that many Pacific countries are implementing similar measures in response to global fuel price volatility.

Permanent Secretaries will meet shortly to also consider energy / fuel saving measures and appropriate triggers to activate such measures to be brought to the Cabinet for its consideration. The meeting will also allow Permanent secretaries to consider effective responses to the impact of cyclone Maila in Western and Choiseul provinces.

Consumers in Honiara are reminded that fuel prices are regulated by law and must not exceed the approved maximum levels.

The Government will continue to monitor global developments and provide regular updates on fuel pricing and supply.

[ENDS]