PNG ‘held to ransom’ by BPNG-Puma saga
News that matter in Papua New Guinea
PNG ‘held to ransom’ by BPNG-Puma saga
PORT MORESBY: Prime Minister James Marape says the
country is being held to ransom by the disruptions in Jet A1fuel supply sandf
ordered a probe into the ongoing Bank of Papua New Guinea (BPNG)-Puma Energy
saga.
“It is now becoming a
national security issue and a cause for concern on functioning of the economy.
“BPNG and Puma must find
solutions to their strenuous business relationship. Puma being unable to to
maintain the supply of fuel products to its customers is because of ongoing
issues with BPNG,” he added.
The shameless and disgraceful issue was reported by The National:
PNG ‘held to ransom’
January 6, 2023The
NationalMain Stories
“It is now becoming a national security issue and a cause for concern on
functioning of the economy.
“The Bank of Papua New Guinea (BPNG) and Puma Energy must find solutions to
their strenuous business relationship. Puma being unable to maintain the supply
of fuel products to its customers is because of ongoing issues with BPNG,” he
added.
Marape said he had ordered BPNG, immediately after an urgent National Security
Advisory Committee (NSAC) meeting yesterday, to find a short-term solution by
lifting restrictions on Puma so that their supply of fuel products can continue
without compromising the Central Bank’s fiduciary requirements.
“I want to also inform the country and businesses that today, BPNG has the
highest-ever level of foreign reserves (FX) of more than K13 billion – more
than enough for a year. That is because of the Government’s fiscal policies
helped in raising FX in the Central Bank over the last three years to record
levels.
“For example, concessional US soft loans from Asian Development Bank,
International Monetary Fund, World Bank, Japan and Australia have helped to
raise our FX.
“We were also helped by increased prices of commodities, not just in oil and
gas, but more importantly an increase in agriculture production. Therefore, FX
in the Central Bank is not an issue in this case of Puma. It is just a case of
BPNG ensuring that transactions are done prudently and correctly.
“However, in this case, BPNG may have stressed Puma to the point that they are
unable at supply fuel products due to unavailability of matching US dollars for
fuel imports.
“I have, immediately after today’s NSAC meeting, written to Central Bank asking
them to find solutions to the issues with Puma without compromising the role
they play in ensuring that legitimate transactions take place.
“The issues between BPNG and Puma have been going on for some time and the
Government will have a holistic look at the entire saga.”
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All-of-govt approach
needed, urges official
January 6, 2023The
NationalMain Stories
THERE needs to be an
all-of-government approach to address the foreign exchange (FX) shortage in the
country, according to the Micro, Small and Medium Enterprises (MSME) Council
president Des Yaninen.
Yaninen was waiting in Kokopo, East New Britain, to catch a flight to Port
Moresby yesterday, but the flight was cancelled.
“A shortage of foreign currency has resulted in flight cancellations
nationwide,” he said.
“Fingers are pointed at the central bank (Bank of PNG) and a standoff with Puma
energy that supplies jet fuel to Air Niugini.
“BPNG cannot give out what it doesn’t have. It has to carefully allocate scare
resources to all players in the sector to ensure there is sufficient import
cover to keep the country going.”
He said to bring in more FX, the Government and all its agencies must:
- MAKE PNG a more attractive
investment destination. We need to reduce the cost and improve the ease of
doing business in PNG. We need to make PNG safer. We need to provide
commercial land. We need to provide tax incentives;
- MAKE PNG more attractive to
tourists. The tourist dollars that come in help out FX. A major
embarrassment right now is that we have a big group of surfers stuck in
Kavieng without surf boards and stranded because of the Puma issue. It
takes years to convince tourists to come to PNG and the first impression
they have is a terrible one;
- WE need to achieve a trade
surplus, meaning PNG has to export more than it imports. We have to grow
the agriculture and manufacturing sectors so we become a net exporter
which brings in more FX. Currently PNG is a net importer, meaning that we
import more than we export which is why we will always have FX issues.
He said MSMEs and SMEs must have access to FX
to grow.
“I am stuck in Kokopo, unable to return to Port Moresby, which is affecting my
business,” he said.
Concern over forex
shortage
January 6, 2023The
NationalMain Stories
DEPUTY Opposition Leader Douglas Tomuriesa
says it is bad for business when the country is continuously facing a shortage
of foreign exchange (forex).
“This is not a new subject. It was raised in the last Parliament and the
Government played it down saying it was just an oversight that can be managed,”
he said.
“If it can be managed, why is it taking two to three months to sort out?
“It’s a bad image we are portraying to potential investors. Government needs to
fix the forex issue if it is serious about foreign investments.”
Tomuriesa was reacting to yesterday’s cancellation of Air Niugini flights
because of a shortage of fuel after Puma cut off supply due to a foreign
currency issue.
Air Niugini said on Wednesday that it had to cancel flights yesterday.
A spokesperson for PNG Air said “flights are operating normally today
(yesterday), although there is a risk to future operations. PNG Air is also
supplied by PUMA Energy, and will eventually be affected should the fuel
restriction continue. At this time, we are using fuel from the company’s
limited storage facilities.”
Puma country general manager Hulala Tokome, told The National that
for months, “we have been working with various stakeholders to ensure
sustainable flows of foreign currency, which is critical to buying fuel on the
international market”.
“Unfortunately, due to pending approvals of our FX by the relevant authority,
we are unable to continue maintaining the necessary supply of product to all
our customers.”
Flight cancellations
leave passengers stranded
January 6, 2023The
NationalNational
National Airport
Corporation security personnel barring entry into the terminal, forcing
everyone to wait outside. – National pics by LARRY ANDREW
HUNDREDS of passengers
were stranded at Nadzab Airport in Morobe yesterday after Air Niugini cancelled
flights due to a fuel shortage issue.
National Airport Corporation security personnel barred entry into the terminal
forcing everyone to wait outside.
Gerard Motou of the Autonomous Region of Bougainville, who was to catch a
flight via Port Moresby to Bougainville, said he was attending a church
gathering in Markham and was supposed to fly out yesterday.
“The situation is beyond our control and we did not expect it.
“It is now between Air Niugini and Puma to sort out this issue with the help of
the Government,” he said.
Gerard Motou, from
Bougainville, waiting outside Lae’s Nadzab Airport. – Nationalpics by LARRY
ANDREW
“We have not heard from Air Niugini staff what
assistance they will provide to us for this inconvenience.
“We do not have relatives here.”
Uneng Musa, of Finschhafen, returning from spending the holidays in his
village, was to catch the 2pm flight to Port Moresby where he lives and works.
“I bought my ticket on Wednesday,” he said.
“I saw the message online that Air Niugini domestic flights will be cancelled.
“I was told to come to Nadzab and wait around (as flights may resume).”
Passengers frustrated
over flight cancellations
January 6, 2023The
NationalNational
Air Niugini passenger
Andrew Bepi Kole venting his frustration at the domestic terminal yesterday.
FRUSTRATED passengers at the Jackson Airport in Port Moresby
yesterday urged the Government to quickly address flight cancellations which
are becoming frequent.
Andrew Bepi Kole and his family were at the airport to catch their Air Niugini
morning flight to Mt Hagen’s Kagamuga yesterday. But they were left stranded
with hundreds others at the airport.
Stranded passengers at
the Jackson domestic terminal in Port Moresby yesterday. – Nationalpics by
NICKY BERNARD
“We have business trips and family trips in this busy period
of travel, along with the increase in airfares. We can’t afford to stay for
another cancelled flight,” he said.
He said this family spent K4,795 for the airfares of six people.
“They (Air Niugini management) are not here to address passengers,” he said.
Kaka Andrias (left),
Mare Lucas and Gabriel Ariro with his one-year-old daughter Grace at the
Jackson domestic terminal in Port Moresby yesterday.
Kole
said they would just have to wait at their Eight-Mile home for further
information from Air Niugini.
Air Niugini cancelled all its domestic flights after Puma Energy suspended the
supply of fuel due to the lack of foreign currency.
Gabriel Ariro, who was at the airport to send off a relative, said air travel
was the main mode of transportation to other regions.
Attempts to get a comment from Air Niugini yesterday were unsuccessful.
Puma not a BPNG client
of foreign exchange
January 6, 2023The
NationalNational
By DALE LUMA
BANK of Papua New
Guinea (BPNG) acting governor Benny Popoitai says Puma Energy is not a client
of the central bank when it comes to foreign exchange (FX).
“Commercial banks deal with Puma. If they are compliant, they will get their
foreign exchange.
“The central bank provides foreign exchange to the commercial banks and they
are the ones who distribute to all their clients. Puma supplies to the retailer
and also to Air Niugini and others. So to link Puma with us is in my view
wrong,” Popoitai said.
He was responding to the FX issue which affected Puma and resulted in the
company stopping its supply of fuel products to customers including Air
Niugini.
Popoitai said: “I don’t know if we have a problem with FX. Commercial banks
have to answer that.”
It is understood that businesses lodge their FX requirements through commercial
banks who then lodge the orders with BPNG for approval. Puma Energy’s FX orders
have not been approved since Dec 6 which restricted the company to trade and
pay for crude and other products, according to country manager Hulala Tokome.
BSP Financial Group Limited group general manager for treasury Rohan George
told The National: “BPNG generally intervenes on a monthly basis
providing FX liquidity, through six authorised foreign exchange dealers to the
market. In 2022, BPNG FX intervention volumes rose by 32.5 per cent. In 2022,
BPNG intervention was 9.58 per cent of PNG FX market turnover.
“BSP’s BPNG approved outstanding FX orders more than halved in December, due to
a large end of year FX inflows and BPNG FX intervention.
“December BPNG FX intervention was 16.2 per cent of PNG FX market turnover.”
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