Papua New Guinea Declares 30-Day State of Emergency Over Fuel Shortages

Papua New Guinea's Prime Minister, James Marape (C), arrives at the house of Governor-General Bob Dadae in Port Moresby on May 30, 2019. (Gorethy Kenneth/AFP/Getty Images)

The government of Papua New Guinea (PNG) declared a 30-day state of emergency on July 31 after fuel provider Puma Energy imposed rationing measures because of delayed payments for purchasing fuel.

Petroleum and Energy Minister Kerenga Kua said in a statement that the decision is “a direct result of the current disruption in the supply and distribution of fuel and petroleum products and foreign exchange.”

Mr. Kua warned that the dispute between Puma Energy and the Bank of PNG over foreign reserves would directly affect the country’s energy security, government services and businesses, and the people’s welfare.

“I want to reassure all government institutions, the business community, and the general public that the government is prioritizing to resolve this energy supply crisis and ensure that normalcy is returned,” he said.

Mr. Kua said the government is aware of the closure of the Puma companies’ operating accounts by Westpac and ANZ Bank, as well as the Bank of South Pacific’s (BSP) notice of intention to close Puma’s accounts.

“This action taken by the BSP is occurring independently of the government and Bank of PNG’s influence and is purely a global banking and finance response,” he added.

Mr. Kua said the Bank of PNG had been instructed to provide authorized foreign exchange dealers. The BSP also was urged to give all consumers, including Puma companies, access to their bank accounts and the supply of foreign exchange until the completion of the investigation.

His announcement came just days after Puma Energy implemented fuel rationing measures on July 27. The company cited constraints on its access to banking services as a result of the parties involved not complying with PNG government directives.

State-owned flag carriers Air Niugini and PNG Air were forced to cancel all domestic flights starting on July 28 because of the country’s fuel supply issues.

“Without the necessary access to sufficient [foreign exchange] and financial services, Puma Energy remains unable to import products from the international market and must actively manage remaining fuel stocks to extend the security of supply for emergency services, hospitals, and critical infrastructure,” the oil company stated.

In a statement, Puma urged the BSP to fully comply with the government directives, saying that the bank hadn’t provided any explanation for the imposed restrictions on its financial services.

Hulala Tokome, chairman and managing director of Puma Energy, said the BSP is “jeopardizing the entire community” of the Pacific Islands nation and urged the bank to come forward with a resolution.

“Our hands are tied, and we are growing more concerned with every day that passes. While we have temporarily reinstated supplies as a gesture of good faith, necessary actions have not been taken by other parties,” Mr. Tokome stated.

“We are reaching a point of no return. It will be crucial that we once again ration the remaining fuel stocks to extend the availability of supplies for emergency services, hospitals, and key critical infrastructure.”

Mr. Tokome stated that the matter has been brought to the attention of the PNG government for further action.