THE LOCAL COSTS OF A FAR AWAY WAR

By Staff Writer

As the Iran war engulfs the Middle East, Cayman is bracing for the interim and long-term impact on fuel prices and the wider cost of living. With constantly shifting messaging muddying what and when a resolution to the conflict might be likely, there are already some initial indications of the effects locally.

A review of the fuel prices on the website of the Utility Regulation and Competition Office (OfReg) shows a marked difference in prices across comparing this past January and February to March. Fuel prices tend to be higher on Little Cayman due to shipping costs and other factors.

The regulator recently moved swiftly to shut down a viral WhatsApp rumour suggesting up to CI$7.00 was being charged for regular petrol at unnamed outlets in Grand Cayman. That’s well in excess of the officially published price of between CI$4.93 and CI$5.32 (current at 25/3/26).

On its website, OfReg “encourages the public to call 946-4282 or email us at fuels@ofreg.ky  to advise if any of the fuel prices at the retail fuel outlets are different from the prices provided”. 

GLOBAL MITIGATION MEASURES TO ‘COMBAT’ THE MILITARY EFFECTS

The ongoing uncertainties in the global energy market are expected to persist, continuing to impact the cost of living worldwide.

Several governments are already taking contingency steps to mitigate the impact on their citizens.

In the UK this week, the Chancellor of the Exchequer (Minister of Finance) Rachel Reeves, said in a statement to Parliament that she was considering reducing tariffs on food to keep prices down. She also announced that she would be meeting with banks and supermarkets to “discuss how they can further support their customers”. The Chancellor also said the British government will “monitor the cost of household essentials for both price rises and disruption” and will “crack down on price gouging”.

Elsewhere, more drastic measures are being taken, given the severity of the fallout from the Iran/Israel/US war that’s already ensnaring other Gulf states and having effects further afield.

In the Philippines, which imports almost all of its oil from the Gulf, the government this week became the first to declare ‘an energy emergency’ after local diesel and petrol prices more than doubled since the war broke out on February 28th.

In the Caribbean, which imports most of its oil and other products from the United States, Sir Ron Sanders - Antigua and Barbuda’s Ambassador to the United States, issued this statement to the region: “As American producers face higher fuel, fertiliser, logistics, and financing costs, those increases are passed on in the prices of exports to the Caribbean. Our region is therefore not only directly exposed to world oil and freight markets; it is also importing US embedded costs in the form of more expensive food, manufactured goods, and inputs.”

Meanwhile, at the Arthur Lok Jack Global School of Business at the University of the West Indies in Trinidad and Tobago, Mariano Browne, the institute’s Chief Executive Officer, made a sombre warning, especially to tourism-dependent Caribbean states. “When airfares and hotel prices rise due to higher fuel costs or inflation reduces the disposable incomes of potential visitors, tourism declines everywhere.”

CAYMAN’S CONCERNS

As Cayman continues to assess the situation, early indications are that the knock-on effects locally could be significant with implications for the rate of inflation and the consequential impacts on the cost of living.

Just-released data from the Economics and Statistics Office(ESO) shows that the annual rate of inflation for 2025 was 1.3 per cent, the lowest rate since 2020 when it was 1.0 per cent. Since then, the annual rate of inflation has been increasing, peaking at 9.5 per cent in 2022 (the highest rate since 2010). While it has been decreasing over the past three years, the impact of the Iran war is likely to change that to an upward trend.

Caymanian Times reached out to the Caribbean Utilities Company (CUC) for its guidance to help consumers cope. The utilities provider said: “CUC’s largest generating units operate on diesel, which means the company is closely tied to global fuel price movements. Although CUC does not source fuel directly from Middle Eastern producers, the region’s production decisions and geopolitical stability play a major role in shaping the global crude market that ultimately drives the cost of refined diesel. Because of this, fuel prices in Cayman tend to move in step with broader international market trends.  Increased costs will impact customers’ electricity bills, and we will do our best to keep customers informed. We post fuel rates that will impact electricity bills on our social media channels and on our website monthly. We would ask customers to closely monitor those updates.”

Asked by Caymanian Times, “What can residents do to mitigate any increase in Electricity costs?”, CUC offered the following advice:

“CUC continues to encourage customers to actively monitor their energy consumption, particularly as we enter the hottest months of the year when electricity usage typically increases. Customers can track their daily energy use through the MyCUC online portal, and each customer also receives a mid-month consumption report to help them stay informed and manage their usage more effectively. 

With air conditioning being the largest contributor to energy consumption in the Cayman Islands, we highly recommend that customers revisit their usage patterns, especially when no one is home. 

Utilising a smart thermostat to increase air conditioning temperatures when the property is uninhabited and setting the smart thermostat to cool the property 30 minutes prior to occupants arrival is recommended.  CUC recommends 78 degrees Fahrenheit for properties when occupied and 87 degrees Fahrenheit or higher for an unoccupied property.

Using these tools empowers customers to make informed decisions about their energy habits.

CUC also said additional energy-saving tips and resources are available on the CUC website and across our social media channels.