Higher electricity costs for large businesses and manufacturers may have significant repercussions for the broader economy, according to Jitesh Patel, President of the Suva Retailers Association. This concern arises following the Fijian Competition and Consumer Commission’s (FCCC) recent approval of a 24.2 percent increase in electricity tariffs, which is a substantial reduction from the 37 percent hike originally proposed by Energy Fiji Limited (EFL).
Patel warned that the increased production costs are likely to ripple through the supply chain, ultimately leading to higher retail prices at a time when consumers are already struggling with escalating living costs. He stated, “EFL has indicated that most households will remain unaffected, but significant increases could have implications for consumers.” Larger manufacturers, particularly those producing essential items such as food and textiles, may be disproportionately affected. “If business costs rise, the cost of goods will inexorably rise as well,” Patel remarked.
Diren Kapadia, a director at Brijlal, acknowledged that while the tariff increase presents challenges, it is a reality that businesses must face. “It’s not favorable, but it is something we have to accept. Basically everything is going up, and there’s not much we can do about it,” he said.
The FCCC clarified that the updated tariff seeks to ensure the financial sustainability of EFL while aiming to lessen the impact on consumers and businesses. Nevertheless, industry leaders remain wary, noting that continuous hikes in utility costs could undermine pricing strategies, deter investments, and diminish overall business confidence over time.
Amid these challenges, there is an underlying optimism that businesses and consumers will adapt to these changes. Efforts to enhance efficiency and innovation may serve to alleviate potential negative impacts, fostering economic stability even as costs rise.