Pacific leaders launch joint fuel taskforce against Iran-war supply shocks
Eleven Pacific island leaders decided at an emergency summit in Suva to establish a joint fuel supply mechanism to address pressures from the Iran war on energy import chains. The plan includes joint procurement, strategic reserves and price protection instruments.
According to Pacific Islands Forum Secretary-General Baron Waqa's announcement in Suva, Fiji, Papua New Guinea, Samoa, Tonga, Vanuatu, Cook Islands and other member countries agreed on a joint fuel fund worth AU$600 million. The fund's core budget will be financed by Australia, New Zealand and Asian Development Bank resources.
Australia's Pacific Minister Pat Conroy said joint procurement contracts could reduce fuel unit costs for the Pacific region by 10-12%. The plan also envisages establishing three-month diesel reserves at Suva port in Fiji and Lae port in Papua New Guinea. Fuel prices across the Pacific have risen 18% this year due to the Iran conflict.
Vanuatu Prime Minister Charlot Salwai said supply disruptions would be unacceptable for the survival of the Pacific tourism sector. Asian Development Bank Vice President Bhargav Dasgupta said the mechanism could receive $200 million in initial support. The mechanism is targeted to be operational by mid-September.
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