The all-day supply was a rare privilege for Jaluit, the capital under first German and then Japanese rule, and brought with it rare opportunities.

Reliable power enabled the government's telecommunications firm to extend Internet and cellphone services to Jaluit last year, and the Bank of Marshall Islands followed with its first outer islands full-service branch.

But those advances have suddenly gone into reverse, with skyrocketing fuel costs forcing electricity rationing, and bringing an end to the Internet and cellphone services and the suspension of bank facilities.

Power has been cut to 10 hours a day, and telecoms officials say they have been forced to disconnect transmitting equipment to avoid potential damage.

The Marshall Islands is a Western Pacific territory of 70 inhabited islands -- only five of which have power -- scattered across 500,000 square miles of Pacific Ocean.

Here, people fish for food and make copra to produce coconut oil to earn a few dollars to buy necessities such as kerosene and rice.

Marshalls Energy Company manager Steve Wakefield said the price of diesel leaped from 5.13 dollars per gallon to 6.97 dollars virtually overnight on the back of surging global prices.

The company's operations on Jaluit have historically been subsidised by its larger Majuro operation, since the level of business on the small island could not sustain a diesel-fired plant.

But following the latest fuel price hike, Jaluit faces a monthly fuel bill of some 60,000 dollars, with fees from locals amounting to less than half this amount -- "losses that the utility cannot maintain," Wakefield said.

He is hopeful 24-hour power can be restored once the company installs its own fuel holding tanks on Jaluit, which would cheaper to run than the present system of using storage tanks from an outside supplier.

Meanwhile, the 1,000 islanders who have enjoyed full electricity since the early 1990s are scrambling to get generators to power freezers, refrigerators and other items.

They also are now lacking the bank, which had offered a range of facilities previously unheard of in the remote islands, including wire transfers.

Over the past year, an increasing amount of money has been transferred from Marshall Islanders living in the United States to relatives on Jaluit because they had a secure means to get the funds there.

To get money to other outer islands, the cash previously had to be carried by hand on boats or planes.

Bank of Marshall Islands President Patrick Chen said that from Monday the bank will establish limited services on Jaluit by basing a staff member there every second week.

"It will be difficult for the bank to provide these services without the benefit of Internet access for the computers, but we'll do it through radio," Chen said.

The Marshall Islands, where the United States conducted its nuclear tests from 1946-58, was settled by a German trading company in 1885 and became part of German New Guinea.

Japan conquered the islands in World War I, and administered them under a League of Nations mandate until they were invaded and occupied by US forces in 1944.

The islands gained independence from the United States in 1986.

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