Price Controlled Petroleum and LPG Prices and COVID-19: Some Evidence From Fiji

Abstract

This note examines the effects of the COVID-19 pandemic on price-controlled petroleum and LPG prices in Fiji. We develop autoregressive models of price control orders authorised by the Fijian Competition and Consumer Commission and find that the controlled prices of imported fossil fuels in Fiji did increase during the COVID-19 because of supply chain issues during the pandemic. Moreover, the effect of the pandemic on LPG prices was greater than those on petrol prices. These effects of the COVID-19 pandemic are found to be insignificant, which implies that consumers of imported fossil fuel were shielded by the price control policy and in the case of transport fuel, reduced demand for transport fuel due to the economic lockdowns also provided some relief in the domestic market.