27 May 2022
Solomon & Company (St Helena) PLC on 26 May 2022, announced a significant increase to the price of fuel.
The fuel increase will likely come alongside increased inflation over the next few months. This means that not just fuel, but also basic goods and services, may increase in cost.
This is due to external factors that are affecting countries across the globe and are outside of the control of St Helena.
Factors driving the increase
In the 2022 Budget Speech delivered 13 May 2022, Minister for Treasury, Infrastructure & Sustainable Development Mark Brooks noted that a multitude of external factors, which are outside of the control of St Helena, would soon have significant impact on our remote island:
- The war in Ukraine: This conflict has disrupted the global supply chain for fuel and other goods: For example, petrol and diesel producers across the globe are facing an increase in logistics and refining costs. The Bunker Adjustment Factor (BAF) on the MV Helena had already been impacted, with the cost of a container jumping up around £600 within two voyages, and on-island fuel has now also been impacted.
- UK and South Africa inflation rates: St Helena is heavily reliant on imports from the UK and South Africa. Therefore, the climbing inflation rates in those countries are set to result in higher inflation in St Helena.
- COVID-19: The pandemic has continued to disrupt supply chains, making it difficult for our isolated South Atlantic Island to source essential goods and services.
St Helena is not alone in experiencing increased prices this year; due to these global factors, countries across the world are experiencing similar pressures.
SHG’s response
SHG is currently developing a suite of support measures, aimed at cushioning the impact of increased costs on the local community. These measures should be announced within the next few weeks.
SHG’s economics function is also working on publishing updated inflation forecasts for St Helena, in order to help individuals and businesses prepare for the times ahead.
Minister Brooks commented:
“It is important in times like this for the government to be honest and transparent: We know this increase is going to be hard, and that it is likely to get worse. While we cannot control the external factors driving up prices on-island, we can do our best to mitigate the impacts locally. We are actively working on support measures to help individuals and businesses. This suite of support measures should be announced in the next couple of weeks. In the meantime, we know that the community will come together to help each other in the way we do so well on St Helena, as every small action will make a difference over the next few months.”
SHG
27 May 2022