The fuel crisis in Papua New Guinea has been restored temporarily after acting Prime Minister John Rosso successfully mediated in a meeting Monday between the Bank of PNG and Puma Energy.
Rosso said that the Central Bank has released foreign exchange to alleviate the fuel crisis.
Effectively assuring Papua New Guineans, residents and businesses that a short-term arrangement has been reached between Bank of PNG (BPNG) and Puma to continue supplying fuel while work is being done to address regulatory requirements of BPNG.
He clarified that the issue between BPNG and Puma was not a shortage of foreign currency but it was the regulations that BPNG had, which Puma agreed to work with BPNG to resolve.
Rosso also said in terms of foreign currency reserves, he was assured by BPNG that Papua New Guinea had K13 billion (US$3.6 billion) in foreign reserves in the bank.
Thus dispelling rumours from public that there was no funds.
“Our Prime Minister is in Fiji attending to a meeting that has been scheduled for a long time, but today we met with the Bank of PNG Governor and representatives and the Puma CEO and the fuel supplies will return to normal as of tonight (Monday night).
“There will be no fuel issues experienced over the next few weeks and few months,” Rosso said.
Prime Minister James Marape in a press conference before jetting off to Fiji said with instructions given for the forex issue to be sorted out between BPNG and Puma, ExxonMobil and TotalEnergies have assured to step up.
“The Central Bank has its fiduciary responsibility to ensure that compliance to our country’s rules and regulations are done with all within our economy but at the same time they also have the responsibility to our nation as they upkeep the monetary policy to ensure that our economy is not stippled or suppressed,” he said.
“Puma at the moment, because they have a larger supply footprint, they have a larger storage facility and there is the upper hand, but the downstream business of ExxonMobil as well as downstream business of TotalEnergies have given us assurance that they can step up.”
Opposition Leader Joseph Lelang has urged the Prime Minister to attend to the country’s Foreign Exchange issue rather than leaving it to yet another committee to resolve.
Lelang said following the severe fuel shortages and rationing over the weekend, it was now clear it is a national emergency.
He called on government to immediately address the shortages of foreign reserves in the immediate to short-term because this problem is already seeping into other sectors of the economy and there is no way this is going to correct itself.
“Now is not the time to take golfing trips or to leave government responsibilities to private sector committees,” Lelang said.
“Naming a committee of competing fuel importers and distributors to resolve a national crisis will resolve nothing.”
“Now is the time to take hands on and collective government action. Now is the time for Parliament to be reconvened to address the issue.
“I cannot see how a committee is going to resolve the current foreign exchange shortage because none of the members of the committee has any legal authority whatsoever to compel the Central Bank to issue foreign exchange to themselves or others standing in the queue.
“The fuel shortage is only symptom of another problem. Soon it will be shortages of imported food and other essential inputs for the smooth operation of business and commerce in the country.
“The Central Bank needs to come out of its concrete building and tell us what the real situation is with the foreign exchange shortages.
“They need to tell us why Puma cannot access foreign exchange to conduct its business now leading to a critical problem and crises proportions.
“They need to tell us how they are protecting the convertibility of the kina,” he said.
Meanwhile, deputy Opposition leader Douglas Tomuriesa says the government’s approach to resolving the current fuel crisis will fail.
He said that the country would still face the same forex shortage issue if the Government did not immediately address it.
Tomuriesa said the root problem lay with the chronic foreign exchange (forex) crisis.
“Puma Energy has demonstrated that it has the capacity to supply the fuel needs of the country,” he said.
“However, Puma Energy requires forex to purchase crude oil on the world market to process at its Napa Napa refinery.”
On Sunday, fuel stations in Port Moresby and around the nation ran low or almost out of petrol, creating panic among the public and business houses.
BPNG has been urged to supply more American dollars to Puma Energy to address the current fuel crisis, according to the Port Moresby Chamber of Commerce and Industry.
Chamber president Rio Fiocco said the BPNG should be supplying more dollars to the commercial banks as most businesses were fed up with joining queues.
“The Bank of PNG should be supplying more than what they have been selling each month to the commercial banks so that the banks can clear some of the backlog so that importers can pay their suppliers overseas,” he said.
“Many suppliers are fed up with being told that payment is in the queue with their customers’ commercial banks.
“If PNG companies are continuously slow in paying their suppliers, there is a risk that they will in future refuse to sell to PNG and instead sell to other countries where there is no delay in them getting paid.”
He said the problem must be resolved as any continuation would be costly.