Papua New Guinea to use subsidies to curb price hikes in essentials

News that matter in Papua New Guinea

Papua New Guinea to use subsidies to curb price hikes in essentials

PORT MORESBY: Prime Minister James Marape says the Government is prepared to provide subsidy for the rising cost of goods if effects are felt from the Ukraine-Russia war.

“The crisis between the two neighbouring nations will have a global effect,” he added.

“Whatever happens in different parts of the world will have cascading effects on different economies globally.

“In fact, this (March 1, 2022) morning, I was supplied a brief from Treasury. The price of crude oil, for instance, has gone past US$103 (K356.54) per barrel,” he added.

The news break was reported by The National:

Subsidy to cushion price hikes

March 2, 2022The NationalMain Stories

By SHIRLEY MAULUDU
TREASURY may be required to provide subsidy to cater for the rising cost of goods if effects are felt of the Ukraine-Russia conflict, says Prime Minister James Marape.
“The crisis between the two neighbouring nations will have a global effect,” he said.
“Whatever happens in different parts of the world will have cascading effects on different economies globally.
“In fact, this (yesterday) morning, I was supplied a brief from Treasury. The price of crude oil, for instance, has gone past US$103 about (K356.54) per barrel.
“That is a scenario that we are monitoring very carefully, simply because it has a cascading effect on not just our local economy but globally as well.”
Marape said the PNG economy was import-dependent with about 80 per cent of goods, including fuel being imported.
“We are working closely with some of our major fuel importers like Puma, ExxonMobil, to see how best we can minimise the effects of rising prices,” he said.
“Treasury has been signalled to look at how best, and if there was a need for subsidy to be given if there is inflation related to the crisis so that the burden is not felt in a big way by our economy.”
On the positive note to what is happening, Marape said the prices of oil, gas and gold had gone up so there might be some trade rebalancing.
Marape spoke in Parliament yesterday in response to questions from Northern Governor Gary Juffa on the Government’s response to the Russian invasion of Ukraine on Thursday.
“There are serious consequences of this event on trade, and our economy will be affected in some way or another,” Juffa said.
“Is the Government monitoring the situation and its impacts? What are the possible steps the Government will take to mitigate any negative situation arising from this event, such as the increase in (consumer) prices?” On the war in Ukraine, Marape said PNG’s position would be for both countries (Russia and Ukraine) to reach a resolution.

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