Pacific island nations have been hard hit by the soaring price of oil due to the conflict between the United States, Iran and Israel as many rely on imported diesel fuel just to keep the lights on.

Speaking to AFP during a visit to Auckland, New Zealand, President Surangel Whipps Jr said 70 percent of his country's power comes from diesel generation -- and that the price had doubled.

"It ripples through the whole economy and of course individual people and their livelihoods," he said.

"The price of gasoline hasn't doubled but it's gone up at least 50 percent and for people that have to commute, that's a big burden on them," he told AFP.

"We're seeing that that's a big impact on the daily lives of our citizens."

The Palauan archipelago -- a string of limestone islands and coral atolls -- lies about 800 kilometres (500 miles) east of the Philippines.

- Firm ties with Taiwan -

But the tiny nation has also found itself the subject of diplomatic furor over the status of the self-ruled island Taiwan, which China claims as part of its territory and has threatened to use force to seize it.

Palau is one of just a handful of countries to recognise Taiwan diplomatically.

And Whipps said Beijing had been "very outspoken" on the need for his country to drop its diplomatic recognition of Taiwan.

"China has been very outspoken that we need to denounce Taiwan. We have said 'we have no enemies, but nobody tells us who our friends are'," he said.

"They reach out, they have issues," he said.

"I understand their position, and we've made our position very clear."

But he insisted: "Those of us that are aligned with Taiwan have the same rights as those that are aligned with China and we should be treated equally."

- 'Watching islands disappear' -

Palau is also considered extremely vulnerable to rising seas caused by climate change and Whipps has acknowledged that some of his country's atolls could be lost in coming years.

His nation will host a special climate event as part of the 55th meeting of leaders of the Pacific Islands Forum in early September ahead of the UN's COP31 climate summit in Turkey.

Whipps told AFP it was difficult for many nations to understand just how much of a threat climate change posed to countries like his.

"I go and I talk at these COPs, and I say 'you might as well bomb us', because, you know, it's just like a slow death is what we're having right now and watching islands disappear," told AFP.

"There's an island in Palau that is one third the size that I know when it was back in 1980 when I visit first visited it."

"We're losing the land, which is where our culture comes from."