St. Vincent and the Grenadines will experience a time-lagged but inevitable rise in petrol and energy costs due to the ongoing geopolitical conflict in the Middle East.
While the country is better positioned than in the past, the “knock-on effect” of global price spikes is unavoidable, Opposition Leader Ralph Gonsalves said on Monday.
Gonsalves said St. Vincent has significantly increased its fuel resilience by establishing over three months of storage capacity at the Hugo Chavez Storage Plant at Lowmans. This he said is a major upgrade from the seven to nine days of storage the country had previously.
Despite the three-month buffer, a lag exists before consumers feel the full impact at the pump and in utility bills.
“For instance, Vinlec will eventually see an increase in its fuel surcharge due to the rising cost of imported fuel, but this will likely not appear in the current month’s billing cycle, instead showing up in the next”.
The price of Brent crude recently reached $104 per barrel, up from the $70s. The local pricing mechanism is tied to international benchmarks (specifically the Shell West price), meaning higher global costs will eventually be reflected locally.
The conflict has severely impacted the Strait of Hormuz, a critical shipping lane. Traffic through the strait dropped from 1,229 passages in a comparable period last year to just 77 passages in early March 2026. This disruption is driving up global energy prices and affecting the cost of other essential goods like food and fertilizers.
Gonsalves cites IMF analysis suggesting that a persistent 10% rise in oil prices adds significantly to global inflation.
“Locally, the government has previously used a rolling three-month average for fuel prices to help “iron out” sudden highs and lows for consumers, but if prices remain high for an extended period, the average will inevitably rise as well”.
Gonsalves describe the current global economic outlook as one of “stagflation” a combination of economic depression and high inflation which is expected to place intense “economic and social pressure” on local workers.
