Palauans Feel Global Shock as Gas Nears $7 a Gallon

Rapid price surge highlights island nation’s dependence on imported fuel

By: Summer Kennard

KOROR, Palau (Mar. 9, 2026) — “We’re not part of that operation, but we feel the effects,” said one Palauan resident who closely tracks fuel usage, as gasoline prices across the country jumped about 60 cents per gallon within a single week, forcing many households to rethink budgets and daily travel.

Local fuel retailers report that gasoline prices climbed steadily over several days. On Feb. 28, the price increased from $6.08 to $6.19 per gallon. By March 5, it rose again to $6.41 per gallon before reaching $6.68 per gallon on March 7.

While the increases may appear incremental, residents say the rapid pace has been felt immediately in a country where driving is essential and fuel is entirely imported.

Because fuel is a necessity in Palau, citizens say the quick price jump is straining already tight household budgets.

One resident who describes herself as a “habitual mileage gas tracker” said she records the amount of fuel purchased and miles driven each time she fills up. She believes global geopolitical tensions may be influencing the recent spike.

“Not the war, but the military operation, as they call it,” the resident said. “Knowing Iran is a source of oil, maybe the root of the cost is the operation going on between the United States and Iran.”

Although Palau is far removed from the Middle East, the resident said global events can quickly ripple through international fuel markets.

To cope, she plans to cut back on driving and reduce unnecessary spending.

“My car is big, so I have to limit my driving,” she said. “I’ll probably walk more so I can save fuel, and I will limit my wants so I have enough fuel for the car.”

Another resident who lives in Ngarchelong and commutes daily to Palau Community College said Palau’s reliance on imported fuel makes the country particularly vulnerable to global supply disruptions.

“Since we depend heavily on imported gasoline, those increases affect us more and lead to higher gas prices here,” the commuter said.

The resident said the higher fuel costs are likely to affect her weekly budget for months.

Living in Honto, she travels roughly 50 to 55 miles each day to reach Koror and return home.

“Koror is where school, work and most stores are,” she said. “With gas around $6, almost $7 a gallon, I’ll have to spend more just to get through the week.”

While public transportation exists, she said it does not always align with student schedules.

“Public transportation exists, but it doesn’t always work for students because class schedules don’t always match bus times,” the resident said. “The main way I’ll deal with it is budgeting more carefully, limiting extra trips and only driving when it’s necessary while waiting for gas prices to eventually go down.”

A 27-year-old Palauan citizen said the recent increase will also place additional pressure on personal finances.

“I drive a six-cylinder car and it’s kind of old, so it eats gas,” the resident said. “Even before this, I was already cutting down on unnecessary trips and trying to save money. But now that it increased by 60 cents, that’s a lot.”

The resident said they typically spend between $100 and $120 on fuel every two weeks while working part time and attending school online.

“For the next three months I’ll really have to save,” the resident said. “The best way I can mitigate it is to be smart about my travels and adjust my weekly budget.”

Residents cite several possible reasons for the sudden increase, including geopolitical tensions and potential disruptions to global energy supply chains.

Despite uncertainty about the exact cause, many agree the impact is already being felt at the household level.

For now, residents say they are adjusting their budgets, limiting unnecessary travel and hoping fuel prices stabilize in the coming months.