Prime Minister and Treasurer Hon. James Marape announced recently that Cabinet has invoked provisions of the Essential Services Act in light of the fuel crisis now affecting the country.
“This allows for the Government emergency powers to give directions to companies in the fuel and banking sector in the best interests of Papua New Guinea,” stated Prime Minister Marape. He emphasised that stringent penalties would be imposed on those who fail to abide by the orders.
Prime Minister Marape attributed the fuel crisis to a 1999 agreement between the State and InterOil, predecessor of Puma Energy, which allowed for a monopoly in wholesale importation of fuel and distribution throughout PNG until 2027.
Parliament, reconvening in May, will pass laws aimed at lessening this monopoly of fuel supply, Prime Minister Marape announced.
“The decisions we have made are decisions to compel,” Prime Minister Marape reiterated.
“If those we have passed directions to do not comply, under the Essential Services Act, there are penalties. We are willing to deploy all legal means possible to ensure that our country’s fuel is not sabotaged, our planes keep on flying, our cars keep on moving on.”
Cabinet, acting on advice of the National Security Council, has implemented several measures to address the fuel crisis:
- Use of Puma Energy’s Napanapa Refinery and related infrastructure by other suppliers for fuel storage and supply.
- Appointment of Deputy Prime Minister Hon. John Rosso as Team Leader to administer all Cabinet decisions relating to the fuel crisis.
- Collaboration among relevant Government agencies to ensure continuous fuel supply by Puma Energy, ExxonMobil, and TOTAL.
- Directive to Petroleum Minister Hon. Jimmy Maladina to ensure Puma Energy continues fuel supply to the country.
- Maintenance of Puma Energy’s account by Bank South Pacific for 12 months.
- Submission of a report by Bank of PNG to the Government within one month on the issues with Puma Energy.
- Legislation by Parliament to reduce the monopoly of fuel supply to PNG.
- Collaboration of Kumul Petroleum Holdings Ltd with other companies for import and distribution of fuel.
- Establishment of infrastructure for fuel storage by Kumul Petroleum Holdings Ltd, potentially in cooperation with the USA under the Defence Cooperation Agreement.
- Exploration of the possibility of acquiring Puma Energy’s facilities at Napanapa.
- Assurance by Bank of PNG of sufficient supply of foreign exchange to commercial banks.
- Maintenance of US dollar accounts in-country by all State-Owned Enterprises to ensure a steady supply of foreign exchange.
“I want to apologise if the nation is under stress in respect to fuel,” Prime Minister Marape said.
“We have this monopolistic arrangement, with Puma having a substantial slice of our market, but we are working through legal means to unbundle the monopoly. We will also ensure that Kumul
Petroleum is prepared to bring in additional fuel.”
Prime Minister Marape extended gratitude to ExxonMobil for bringing in additional fuel cargo and announced the Australian Government’s assistance in bolstering fuel security.
