Local businesses in Solomon Islands will be severely impacted if fuel price continues to increase in the next six months, a survey conducted by the Solomon Islands Chamber of Commerce and Industry (SICCI) revealed.
SICCI, as the peak body representing the private sector, conducted the ‘Increase Fuel Price Survey’ online for two weeks in August with 48 of its members with the intention to determine the impact of increase fuel price on the current operation of business, to the increasing price of goods, the cost of utilities, customers demand and employment.
The survey indicated that if fuel cost continues to increase in the next six months, business operation and management of 21% of the respondents will be affected.
“Followed by 17% of increasing cost of logistics and utilities and 14% increase cost of products. For 10% of the survey respondents, it will affect their purchasing power of customers and 8% will re-prioritize and decline business budget,” the Survey reported.
It also stated that 5% of respondents will see a decline of staffs/employees and layoff of causal workers and 2% say the business will stop operating.
According to the survey in the past two months, businesses have also experienced an impact on customer demand as a result of fuel increase. The survey showed that majority of 79% of respondents experience decrease purchasing power of customers.
“Since the increase fuel cost in the last two months, 71% of respondents indicates that it affects logistics and increase cost of utility while 44% indicated low profits, 35% decline business budget, 26% decline business expansion and 9% decrease staffs/employees,” the Survey further reported.
“The recent surge in fuel price recently has seen SICCI receiving grave concerns from the business houses who are prone to bear the brunt of the higher price pressure impacting budgets and affecting purchasing power regardless of their income group,” a SICCI statement said.
40% of respondents of this recent SICCI survey are small business with 1-9 employees, 27% small medium business with 10-49 employees and large business with 100 employees and 6% medium business with 50-100 employees.
30% of survey respondents are from other service activities sector, followed by 14% from agriculture, forestry and fishing, followed by 9% of which were from wholesale and retail repair of motor vehicles and the professional, scientific and technical activities, manufacturing and construction. While the rest are from Administration and food services transportation and storage and Arts, entertainment and recreation. 75% of the survey respondent are located in Honiara and 25% located in the province.
These surveys are critical in SICCI’s advocacy efforts on behalf of its members to stakeholders and engagement with Government a key stakeholder which is critical in working towards a conducive business environment where the private sector can grow and jobs are created for our growing population. Further analysis of the survey data combined with evidences from face-to-face consultations will be compiled into a position paper for recommendations to support businesses that will be submitted to the government.