Too little to avert crisis, Puma Energy received US$12.7 million of foreign exchange in PNG

Photo: Puma Energy

Puma Energy received about US$12.7 million (about K45.8 million) of foreign exchange (FX) on Friday, but this is still not enough to buy fuel needed to address the looming shortage in Papua New Guinea, the company’s top executive says.

The National reports Puma Energy PNG Group of Companies chairman/managing director Hulala Tokome as saying: “We are thankful for the US$12.7 million of FX received on Friday.

But our monthly requirements are much greater.

“At today’s fuel prices on the international market, US$12.7 million (about K45.8mil) is not enough to help us buy the fuel needed to address the looming shortage.

“Don’t forget, we have over US$100 million (over K361.1 million) – or now US$90 million (K325 million) of outstanding invoices in FX that we need to pay our suppliers.

“So the situation still remains very serious.

“We don’t believe these issues are from a lack of FX availability in PNG, on the contrary PNG’s FX reserves are about US$4 billion (about K14.4 billion).

“This is the highest it’s ever been for the last 25 years and this a reflection of our improving economy and a great achievement by Prime Minister James Marape and his team.”

Tokome said access to U.S. dollars was amongst the most important requirements at Puma.

“Like all energy importing companies, we have to buy fuel on the international market in U.S dollars and then sell it to our customers in PNG in Kina,” he said.

“International companies will not accept to be paid in Kina, so we need timely access to the FX market in PNG to convert the Kina we receive from our customers back into USD in order to buy more fuel cargoes to support the energy needs for people in PNG.”

He said Puma by far had the largest demand for FX.

“We can’t speak on behalf of others, but we understand that we have by far the largest demand for USD of any private company currently operating in PNG,” Tokome said.

“For instance, every month, we require anywhere between US$40 million (about K144 million) and US$60 million (about K216 million) to buy fuel from the international market – this range of course depends on what the international price of fuel is.”

Tokome said he was grateful for the leadership of government but felt there are some administrative issues to be ironed out with the Central Bank.

He said: “We have been trying to get to the bottom of this with BPNG — and while we have been working together closely, we are still not clear on all the remaining issues. We do not believe there [are] any fundamental differences.

“We believe we have addressed several matters and we have taken onboard BPNG’s input on various items.

“We believe we are compliant with these issues and can be easily resolved. “At this stage, it is critical that we accelerate the process and reinstate Puma’s access to FX and address the restrictions that are being placed on our core financial services – these are very urgent topics, said Tokome.