Food, vehicle fuel, transportation costs for imported goods, and taxi prices are up dramatically compared to a year ago.
But a lesser appreciated price increase will have a similarly big impact on people in the Marshall Islands. This is the cost of building materials.
The International Monetary Fund said inflation is expected to be six percent this year. But fuel prices today are over 40 percent higher in Majuro than they were 15 months ago.
In January 2021, the price of gas was $4.70 and the price of diesel was $4.85 at Mobil-supplied stations. At PII’s fuel station, gas was $4.50 per gallon and diesel $3.80.
Fast forward to April 2022, and gas prices had jumped to $6.20 at PII and from $6.50 to $6.80 per gallon at Mobil-supplied stations. Diesel at most fuel stations is now over $2 a gallon higher than 15 months ago: At PII’s station diesel is $5.90 a gallon, while at the Mobil-supplied stations, diesel ranged from $6.70 to $6.85 per gallon.
In addition, food prices are beginning to skyrocket. Laura residents have seen big price spikes in staple food items. Eggs that small stores sold for less than $4 a dozen last year are now selling for $5. A dozen medium eggs that up to recently sold for less than $3 per dozen are now selling for close to $4 at downtown grocery stores. This is just one example of many. Higher wholesale and retail food costs impact not only household budgets, but government and NGO budgets for workshops and training programs, as well as Majuro and Ebeye hospitals’ food programs for patients. No doubt vendors selling lunch plates to Public School System schools will either need to increase the prices charged to PSS for school lunches or reduce the already modest amount of food provided on the plates for students.
A US-based firm that contracts with the Marshall Islands government for construction-related work updated Majuro officials with price changes hitting the construction industry.
In the US, 71 percent of all construction materials costs went up, 98 percent of all labor wage costs increased, and 71 percent of all equipment prices are up. What this means is that the cost of essential items such as ready mix concrete was up 28 percent, structural steel was up 24 percent, hollow metal doors were up 33 percent and copper pipe was up 76 percent while copper wire was up 23 percent. Plywood and lumber prices were reportedly down 24 and six percent.
Taken together, these construction material price increases together with the shipping and transportation costs added on will exponentially increase costs for building houses, business facilities and government infrastructure, such as the next phases of Majuro hospital.
All of these taken together add up to an extraordinarily challenging period for the Marshall Islands.