The Cook Islands is bracing for tough times ahead amid an uncertain supply of fuel — a major problem, as most of the country’s electricity generation depends on diesel.
Two tankers arrived last week, giving the Cook Islands another 40 days of gas. Diesel supplies have been extended out to 60 days and jet fuel to 40 days, but the country remains in a precarious position.
"It goes without saying we are at the end of the supply chain," said Brett Porter from Toa Petroleum.
While fuel comes from Singapore, the vessel only stops in New Caledonia, Vanuatu, Fiji and Tahiti. The Cook Islands’ fuel is dropped off in Fiji and reloaded onto another tanker.
Porter said that tanker then takes fuel to Tonga before continuing on to the Cook Islands.
"That additional stop for the MR tanker — the discharge and the reloading — adds significant costs," he said.
Fuel suppliers in Rarotonga have been notified that contracts are being cancelled and they will now have to negotiate fuel prices on the spot, competing for the same volumes as everyone else.
"Our suppliers are now asking for payment where the order is fixed prior to loading. That’s major — that is not possible for us to comply with — so we’ve gone to the Government and asked for intervention to help pay for that."
1News asked Cook Islands Prime Minister Mark Brown what could be done, and he admitted it was a major concern, but said the Government would assist.
"We’ve provided a facility through our local bank for the procurement of US dollars to our private sector companies, to enable them to make their purchases," he said.
Fuel price hikes are inevitable, with Porter saying he expects petrol to reach the mid $7 per litre range, with diesel costing even more.
Liana Scott from the Cook Islands Tourism Industry Council said nobody wanted to panic too much, "but we need to be realistic about the situation as well".
She said the Cook Islands was currently enjoying strong tourist numbers, with very few cancellations so far, as the Pacific is being seen as a safe zone despite the crisis intensifying overseas.
However, she said the island nation was in a catch 22 situation.
"Tourism is the backbone of our economy, but it is only operational if we have the fuel to support it."
Scott said there were limitations around renewable energy in the Cook Islands, and the tourism industry wanted to tap into alternative sources.
"We’d like to see Government enable renewable energy for businesses and actually encourage it by offering support — cheaper loans through the banks, lower mortgage rates — to enable investment in renewable energy because of the large upfront costs.
"We want open, frank and real dialogue and discussions. We don’t want any hidden agendas — we just want the facts as they are," she said.
There is some optimism the Cook Islands Government will step up. During Covid 19, proactive measures were introduced, including wage subsidies, a pause on electricity bills, and negotiations with banks to support those with mortgages.
Scott said the right time to have those conversations is now, to prepare for the unknown.
"In terms of businesses and the wider community, the worry is there. I think we need to think a little more practically."
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