Caymanian residents have been complaining about the price of fuel at the pumps, which averages CI$4.48 per gallon.  

Also the cost of doing groceries has given many Caymanians and expats a headache at the cash registers.

In the past, the two main fuel suppliers Texaco and Esso blamed the high fees on increasing world oil prices and transportation cost.

Last year, Cayman witnessed several increases before a slight decline in prices in December.  But many complain that the decreases have not gone far enough.

Many letter writers to Cayman Net News said that the local suppliers were not decreasing their prices at a time when US fuel companies had done.

While the hike in oil prices may not affect the Islands immediately it is expected to impact at a later date on residents who are already fuming about the constant rise in the cost of living.

Cayman has a highly mobile public and further escalation in the price of fuel could take its toll on the economy.

Another concern being expressed in some circles is the effect that the conflict would have on the tourism industry, which is a major pillar in the Islands' economic fortunes.

The fear is that tourists may choose to stay put in the US, Canada and the UK, which are lucrative markets for Cayman.

But worse still is the fear that higher oil prices could lead to an increase in the cost of travel that may leave some travellers with no choice but to holiday at home.

That would be bad news for resort, hotel and condominium owners who have just begun bouncing back from the severe blow to Grand Cayman by Hurricane Ivan in September 2004.

The hurricane almost wiped out the tourism sector after most of the properties were either destroyed or extensively damaged.

Industry officials have predicted better-than-before gains given the bookings to date. Some have said the upcoming winter season was looking excellent.

Several properties have invested millions of dollars in renovation and upgrades, while other new companies have recently set up shops on the Seven Mile Beach or other parts of the Island.

Plans are foot by the Mandarin Orient to being construction of a resort in East End later this year and some are worried that the high oil prices may cause a further delay in the commencement date.

Government officials have time and time again said they would not leave their eggs in one basket or simply that they would not depend solely on the banking and financial sector, which is the other mainstay of the local economy.

To this end the Government continues to inject millions of dollar into wooing many more visitors to the Islands, especially from Europe.

Over the past few years, the cruise industry has exceeded the Island's expectation with an average 1.7 million guests arriving here annually, according to Department of Tourism.

Minister of Tourism and Commerce, Hon Charles Clifford, has announced that the country would construct its first berthing facility in the capital, George Town, and would expand tourism to the eastern districts of the Island.

Massive investments are ongoing in tourism but the climate seems to be fuzzy with ever increasing oil prices and visitor safety concerns mounting, increasing terror threats in the Middle East and a possible backlash on the US for openly supporting Israelis in their regular conflicts with their Arab neighbours.

Another sore point for local tourism official is that new Western Hemisphere Travel Initiative kicks in on 1 January 2007, which means that everyone travelling to the US, including its citizens, must have a passport.

It is estimated that 60 percent of Americans do not have a passport and may be unable to return to their homeland from the Caribbean and other Western Hemisphere countries.

Cayman has a very high dependency rate on US travellers, which account for about 40 percent of its business and the largest single group of tourists to Grand Cayman, Cayman Brac and Little Cayman.

A new shipment of petroleum products into the Islands is expected to bring about higher prices, forcing consumers to dig further down into their pockets to maintain their lifestyle in the world's fifth largest financial centre.  

Not only motorists, but all residents could be feeling the pinch as a hike in fuel prices more often than not results in increases in the cost of goods and services in most parts of the world.