Concerns are mounting in the import-dependent Maldives as global oil prices continue to rise following the US bombing of Iran.
Brent crude was up 2.7 percent at USD 79.12 a barrel in the world market on Monday. Oil prices have been rising since Israel launched attacks on June 13.
These concerns have been exacerbated after the Iranian parliament approved the closure of the Strait of Hormuz in response to the US bombing.
The Strait of Hormuz is the only sea passage from the Persian Gulf to the open ocean and about one-fifth of daily global oil production flows through the strait every day.
Analysts predict global oil prices to soar above USD 100 a barrel if the Strait of Hormuz is closed.
Maldives is among the countries that will suffer the most from the rise in oil prices because it is import-dependent.
"We will face a huge consequence from the current oil price. If it goes like this and climbs to USD 100 a barrel, transportation will be more expensive and the commodity prices will go up," a businessman said.
Former Managing Director of State Trading Organization (STO) Hussain Amr said in a column published on Adhadhu that the Maldives does not have many options in a global crisis.
"Higher fuel costs will translate to higher expenditure on transport, higher electricity bills, higher prices for basic groceries. In simple terms, Maldivians will feel the strain on the wallets with their daily expenses. Our economy, already balancing on a tightrope, could find itself with fewer options to shield citizens from rising costs," he stated.
A senior official of a major tourism company told Adhadhu that if the unrest in the Middle East escalates, there will be fewer tourists travelling from the region.
He said the price of transportation would rise with the price of oil and people would be reluctant to travel.
"Such a situation is likely to come. Then Maldives' tourism will weaken and dollars will be difficult to obtain, causing huge losses to the government, businesses and the public," he said.
Despite these concerns, the government has not indicated whether it is preparing for the situation.
Meanwhile, Galolhu South MP Meekail Naseem has submitted a motion to express the views of parliamentarians on the current situation.
STO, the main oil importer, has not yet increased the prices in the Maldives' market. A litre of petrol currently costs MVR 13.50 and a litre of diesel costs MVR 13.92 in Male'.
