FSM has adequate fuel reserves to meet current demand; gas prices protected from market conjectures

FSM President Wesley Simina meets with officials of  Vital Energy-FSM Petroleum Corp. on March 20, 2026. Photo courtesy of the Office of the FSM President

By Mar-Vic Cagurangan

The Federated States of Micronesia currently has sufficient fuel inventory, officials said, assuring citizens that gas prices are set based on actual purchase costs rather than market speculations.

“The foremost responsibilities are to safeguard supply, uphold stability and maintain transparency with the people,” FSM President Wesley Simina said, advising citizens to remain calm.

The FSM government urged its citizens “not to engage in panic buying or hoarding,” saying the nation’s fuel distributor has previously purchased sufficient supply to meet current demand.

The government has issued the advisory amid the Middle East crisis, which has disrupted global energy supplies and caused skyrocketing oil prices. The  ongoing conflict between Iran and the U.S. has effectively closed the Strait of Hormuz, a critical shipping lane that accommodates approximately 20 percent of the world's energy traffic.

The international crude oil prices have increased by 70 percent since the war in Iran broke out.

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Fuel supplies throughout the FSM are provided by Vital Group through FSM Petroleum Corp. The state-owned company provides bulk storage and distribution in Pohnpei, Chuuk, Yap and Kosrae.

Bulk fuel supplies come directly from Guam and Singapore and are shipped by tanker directly into the states’ main seaports. On Guam, pump prices have been fluctuating, with four increases this month averaging $6 to $8 per gallon.

“The government has been reassured in its meeting with Vital FSM Petroleum Corp. that the strategic oil reserves across the FSM continue to be maintained, catering for short-term disruptions and that the future pipeline of supply cargoes under contracted fuel supply arrangements with reputable suppliers remains on schedule,” states a press release from the office of the president.

Officials assured consumers that the nation operates under a price-monitoring arrangement and a pricing policy framework implemented and maintained by the fuel company.

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The office of the president said that any domestic price movements over the coming months will only reflect the actual costs of procuring and transporting products to the FSM.

However, the president’s office said new fuel cargoes have already been impacted by cost increases. Due to the velocity and magnitude of this risk, domestic fuel prices will inevitably be affected in the coming months.

"The FSMPC team informed the president that effective controls are in place and that preparations have been made for the weeks ahead," the president's office said.

While highly dependent on imported fossil fuels for its energy needs, primarily for transportation and electricity generation, the FSM is working to increase renewable energy generation.

The FSM has set ambitious targets for green energy, aiming to achieve 70 percent access to renewables by 2030.

"Achieving universal access to electricity and clean cooking technology by 2030 remains a challenge, but FSM is committed to diversifying its power generation mix with indigenous sources such as solar and wind energy," the FSM government said in a press release on May 5, 2025, announcing its National Energy Policy 2024 –2050 and SDG 7 Roadmap.

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