ROSEAU, Dominica, CMC – The Dominica government, on Wednesday, said it will be taking measures to cushion the impact of the ongoing war in the Middle East, acknowledging that events thousands of miles away will significantly affect the price of fuel, the cost of food, the stability of jobs, and the strength of the local economy.
“Let me be clear, Dominica is not in danger of war, but we are exposed to the economic aftershocks of this conflict that has already caused the largest supply disruption in the history of global oil markets,” Prime Minister Roosevelt Skerrit told a news conference.
But he said the most immediate risk facing Dominica is a sharp increase in global oil prices.
“We import all of our fuel and high oil prices, and of course, it will affect electricity costs, transportation, and the price of goods and services across our economy. We face rising costs of imported food and essential supplies, as global shipping routes and supply chains experience disruption.”
Skerrit said at the same time, there may be a slowdown in global travel and investment, which could affect tourism and inflows into the local economy.
“Your government has not waited for the situation to worsen. We are actively and decisively working to protect the people of Dominica. Over the coming days and weeks, we will implement a series of targeted measures designed to cushion the impact on households and businesses.”
Skerrit said that the government will first introduce targeted relief measures to help manage the rising cost of living, saying “this will include temporary reductions on duties and taxes on essential goods, and increased support for vulnerable households through our social protection programmes”.
He said the government would also take steps to manage energy costs and would work closely with Dominica Electricity Services (DOMLEC) to mitigate the impact of rising fuel prices on electricity tariffs.
He told reporters that Dominica is fortunate that its geothermal energy is coming on stream “just at the opportune time” with the plant in Laudat in the Roseau Valley on the outskirts of the capital, “making good progress and …now in an advanced stage of testing.
“Both generating units have already been tested, producing power and confirming that the plant is functioning well. Over the coming days, we will make final adjustments as we continue full performance testing.
“At the same time, work on the transmission network, which will carry electricity from the plant to homes and businesses, is well advanced and nearing completion,” he said, noting that at the sub-station, all major components required to receive up to 10 megawatts from the geothermal plant are currently being installed and tested.
Skerrit said that as the country prepares for the transition to the main transmission line, some elements of the wider network will be completed later this year, noting, “this will not prevent the plant from beginning operations.
“Overall, we are very encouraged by the progress. This project will significantly reduce our dependence on imported fuel, lower electricity costs over time, and strengthen Dominica’s position as a leader in clean and green energy.”
Skerrit said this is one of the positive impacts that geothermal energy will have, especially when petroleum prices are expected to rise, ”and of course, we have no control over those prices.
“This is one of the main reasons why this government has remained committed to pursuing geothermal energy. It has taken some time and been costly, but in the long run, we believe this will benefit our country and everyone who lives in it.
“And so we are very pleased that we have made tremendous progress on this, and we look forward to the Dominican citizens benefiting from this. As I said, in a time when the volatility of oil and petroleum prices is there with the Iran war and so forth, we expect to be impacted.
“You see, for example, the price of petroleum products at the pump in the United States has gone up, literally days after the war started. For us, we have a three-week cycle, so we are certain that by the next cycle, you will see an increase in the petroleum prices,” Skerrit said.
He said the government will also seek to cushion the impact of the war involving the United States, Israel, and Iran by protecting jobs and economic activity.
“We will engage with stakeholders in tourism, agriculture, and the private sector to ensure continuity and resilience during this period,” he said, adding that Dominica is also strengthening its fiscal management, ”carefully prioritising government spending to ensure that critical services are maintained while some discretionary expenditures are deferred”.
Skerrit said he understands the anxiety that rising prices can bring and the pressure that families may feel in the weeks ahead, “but I ask you to remain calm, to remain united and to remain confident in our ability to weather the economic fallout from the escalating conflict in the Middle East.
“Dominica has faced far greater challenges before, from hurricanes to global pandemics, and we have emerged stronger each time,” he added.
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