PNG govt invokes essential services order to sort out fuel supply issues

9:33 am on 1 March 2024
Puma Energy Papua New Guinea

Puma Energy Papua New Guinea Photo: / Puma Energy Papua New Guinea

In the wake of growing concerns over continuing fuel shortages the Papua New Guinea government has decided to act.

This is after the PNG Cabinet invoked sections of the Essential Services Act to ensure that there is a steady flow of fuel.

For more than a year, the near monopoly supplier of petroleum into PNG, Puma Energy, has had to issue announcements that its fuel stocks were low.

It has blamed its access to foreign exchange, which the central bank, Bank PNG, has been holding tightly to try and limit the country's economic decline.

RNZ Pacific PNG correspondent Scott Waide said a number of fuel stations are regularly closed, others are faced with long queues and the people have been demanding action by the government.

But on Thursday, the Cabinet invoked sections of the Essential Services Act hoping that it will put an end to the country's fuel woes. It means that the PNG government will be to make certain recommendations to those in the fuel and banking sector.

Prime minister James Marape told journalists at a news conference that these provisions were necessary to ensure the fuel supply does not "jeopardise" the nation.

"[At] this point in time when we are under the stress in respect to reliable constant and consistent supply of fuel, Cabinet has met yesterday (Thursday), based on officials who looked through the provisions of law that would enable us to make this decision."

"The Cabinet recommended to the head of state to make emergency declarations and the emergency declarations were made," he said.

"And that the declarations include the head of state authorising the requisition and use of NapaNapa refinery in connection with fuel storage and fuel supply. So that the transport sector in our country - services are not sabotaged.

Marape said the government has also tasked all necessary agencies of state, including the National Energy Authority, the Office of State Solicitor, Department of Petroleum, Department of Treasury, Department of Lands and Fiscal Planning, Kumul Petroleum Holdings Limited other relevant agencies to work together to ensure that fuel the immediate needs of fuel is maintained, in liaison with Puma as the fuel supplier.

The Cabinet has also decided under the emergency order that BSP would continue to hold Puma's account for one year and will work through the issues that the company might have.

The Central Bank has also been instructed to provide a report to government on the issues it has with Puma Energy.

"What is the issues they have with Puma...they've [been] given a month to furnish to the government the issues they may have had with Puma that has caused distress for the last 5,6,7 years.

"Puma, as a business in our country, has every right to ask what is the black spot, what is the black label that makes a central bank have an issue with us."

Get the RNZ app

for ad-free news and current affairs