This report was prepared by the Asian Development Bank. This report was prepared as part of the output of the Asian Development Bank (ADB) regional technical assistance project (TA 6477 REG); Preparaing a Response in the Pacific to High Prices, which was jointly funded by the ADB, the Australian Agency for International Development (AusAID), and the New Zealand's International Aid and Development Agency (NZAID). The goal of the project was to identify, develop and implement short-medium and long-term response plans to commodity price increases in Pacific Developing Member Country (PDMCs) in order to promote sustainable development in the region. In order to achieve this, the report is expected to contribuite to improved energy planning and policy making in PDMCs.

Oil plays a vital role in the economic development and macroeconomic stability of Pacific developing member countries (PDMCs). It provides an essential input into economic production, predominately through transport and electricity services. It also affects wider community welfare through transport and electricity services. It also affects wider community welfare through the price of fuels for cooking; the cost of goods delivered and access to local and overseas markets; and expenditures for fuel and fertilizer inputs for agriculture, forestry, and fisheries.

Keywords: PDMCs, Oil,Dependence on Petroleum Fuels in the Pacific, ADB