Marshalls Energy Company (MEC) is providing an update on the ongoing fuel crisis, as global conditions remain volatile following the onset of the conflict in Iran earlier this year.
As a utility that relies entirely on imported diesel, MEC has been significantly impacted by rising global fuel prices. Before the Iran conflict began, MEC’s diesel fuel shipments cost an average of $3 million per shipment. After the war started, fuel costs skyrocketed. The shipment that arrived in April cost more than three times the normal price—tripling MEC’s usual fuel expense.
To put this in perspective: MEC suddenly had to pay for one shipment what it normally pays for three. The same amount of fuel that used to power our islands for weeks now costs what three shipments used to cost. This wasn’t a gradual increase we could plan for—it happened almost overnight when the conflict began. Every gallon of diesel MEC burns to keep your lights on, your refrigerators running, and your businesses operating now costs more than three times what it did just months ago. This sharp increase reflects the severe strain on global fuel markets and supply chains, but more importantly, it represents an enormous financial burden on your utility company that must be addressed to keep the power flowing.
If MEC had adjusted its tariff based on the April cargo cost alone, the increase would have been approximately $0.30 per kWh. To understand what this means: for a household using 500 kWh per month, that would have meant an additional $150 on their monthly bill. However, MEC did not adjust tariffs in April due to temporary financial support from the Government of the Republic of the Marshall Islands (GRMI). This critical government intervention gave MEC breathing room to find a better solution; one that would spread the impact more fairly and avoid shocking customers with the full cost all at once.
MEC must now adjust its tariff in May. However, MEC made a deliberate choice to protect customers from the full impact of the April fuel crisis. Instead of basing the adjustment solely on the expensive April cargo, which would have meant a $0.30 per kWh increase, MEC calculated the average fuel cost over the last three months (February, March, and April). This three-month average includes February and March, when fuel costs were still normal/lower before the Iran conflict disrupted global markets. By averaging the three months together, MEC was able to reduce the necessary tariff adjustment to $0.11 per kWh. This means customers will pay roughly one-third of what the increase would have been if MEC had based it on April’s fuel costs alone.
To further ease the impact on customers, MEC is taking an unprecedented step in its history by implementing this tariff adjustment gradually in two phases. In MEC’s entire operating history, the company has never before spread out a tariff adjustment like this. Normally, when fuel costs go up, the full tariff increase happens all at once. But MEC recognizes that families and businesses across the Marshall Islands are already dealing with rising costs for food, goods, and other essentials. Breaking this increase into two smaller steps gives you more time to adjust your budgets and plan ahead:
- Step 1 (May 4, 2026): Increase of $0.06 per kWh
- Step 2 (May 18, 2026): Additional increase of $0.05 per kWh
MEC is fully aware that prices of many goods and services throughout the RMI have also increased, and this gradual approach is designed to help customers adjust to the higher electricity costs during an already challenging economic time.
MEC will continue to assess whether this phased approach remains feasible in the months ahead, depending on global fuel market conditions.
The current fuel situation highlights the broader challenges faced by island utilities that depend on imported fuel, particularly during periods of global instability. MEC notes that improving fuel efficiency and strengthening generation capacity remain key priorities as it works to manage costs and maintain reliable service.
The Company acknowledges that this adjustment comes at a difficult time and expresses appreciation for the public’s patience and understanding as it navigates these challenges.
MEC wishes to express its sincere appreciation to the Cabinet for their swift action in providing temporary financial support that prevented a much larger rate shock to customers in April. We are also deeply grateful to the MEC Board of Directors for their practical decision-making and support in adopting the three-month averaging approach and phased implementation—decisions that prioritize protecting customers while ensuring MEC can continue to provide reliable service.
MEC remains committed to keeping customers informed and continuing efforts to provide safe, reliable, and sustainable electricity to communities across the Marshall Islands.
For more information, please contact MEC Customer Service at 625-3828 or customerservice@mecrmi.net