Papua New Guinea
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DECLARATION OF EMERGENCY

By Lindy Suharupa

The National Executive Council under Decision Number 215/2023 has announced on behalf of the National Government that a Declaration of Emergency (DoE) has been made effective as of 31st July, 2023 and will last for 30 days henceforth.

Minister responsible for Petroleum and Energy Kerenga Kua, pursuant to Section 136 (1) of the National Energy Authority Act 2021 and Section 4 of the Essential Services Act 2002 made the announcement yesterday morning following the fuel saga on aviation fuel.

“I make this Declaration of Emergency (DoE) as a direct result of the current disruption in the supply and distribution of fuel and petroleum products and foreign exchange”.

Kua said the whole aviation fuel saga has badly affected businesses in delivering essential goods and services with the traveling public also affected hence the 30 days Declaration of Emergency.

According to Minister Kua, this DoE intends to achieve two objectives. 

The first being an interim measure to be put in place to maintain fuel and petroleum products supply in PNG and the second being the long-term objective to ensure that the country’s energy demand, including fuel and petroleum products are permanently stabilized and is readily available for the country.

PUMA Companies (Puma Energy Limited PNG & Puma Energy Refinery Limited PNG) and Bank of PNG have current unresolved disputes on the availability of foreign reserves to purchase fuel and petroleum products for the country.

Kua said this has resulted in the disruption of supply of aviation fuel to airline companies.

“Without the Government’s intervention, this crisis will directly affect the country’s energy security, disrupt government services and businesses and will generally have a negative impact on the economy and welfare of our people”.

Minister Kua further explained that this 30 days DoE will provide avenues for more discussions with the two parties concerned including relevant authorities to find an amicable solution towards these disputes.

He also revealed that a long-term plan will be to look at introducing other interested players to supply aviation fuel to the country as currently PUMA Energy is the sole monopoly supplier in the country.

Minister Kua further gave an insight into the whole fuel saga episode.

“On the 15th of September, 2022, Bank of PNG administered 13 allegations against PUMA Companies.

“PUMA Companies did respond to the Bank of PNG one month later, on the 17th of October, 2022, however both parties failed to resolve these allegations”, explained Minister Kua.

This has resulted in Bank of PNG refusing to supply adequate foreign exchange to Authorized Foreign Exchange Dealers including BSP (PUMA Companies have accounts with BSP) causing PUMA Companies to terminate supply of fuel and other petroleum products to its customers further resulting in airline companies reducing and/or ceasing flight operations nationwide.

A concerned Minister Kua further explained that this 30 days DoE will be in full force affecting both the Bank of PNG and PUMA Companies and all other affected parties for a duration of one month (31st July to 31st August, 2023)

Kua issued two directives after signing the DoE in that Bank of PNG supply enough foreign reserves to BSP (and other commercial banks) and in turn, PUMA Energy supply aviation fuel to airline companies henceforth.

Kua then issued a stern warning to persons and/or parties concerned.

“Let me make this clear to everyone, the Essential Services Act imposes very strong penalties against individuals and corporate organizations should they fail or refuse to comply with directions issued under the DoE.”

” Persons who defile these directives will be prosecuted and charged accordingly”, said Minister Kua.

Kua then assured government institutions, business community and the general public that the government is prioritizing to resolve this energy supply issue and will ensure that normalcy returns and services are restored and back to normal.

For now, we hope the duration of the DoE will bring some lasting solutions to the fuel saga currently faced n the country.