JANUARY 10, 2023
Prime Minister Hon. James Marape says he told Puma Energy bluntly in Singapore on Sunday (January 8, 2023) that he does not “tolerate the country being held to ransom”.
He said this in Parliament on Tuesday (January 10, 2023) when answering a series of questions from Southern Highlands Governor Hon. William Powi in relation to the standoff between Puma and Bank of Papua New Guinea (BPNG) last Thursday (January 5, 2023) over foreign exchange (FX) issues that resulted in all Air Niugini flights being cancelled.
The Prime Minister also informed Parliament that:
• The country had K13 billion in foreign reserves at BPNG which was the highest ever since 1975, so lack of FX was not an issue;
• Government had directed Kumul Petroleum Holdings Ltd and Mineral Resources Development Company to look at downstream processing of PNG oil and gas resources; and
• Puma had been directed to buy Kutubu crude oil from Southern Highlands from Santos in PNG Kina and be processed in-country at its Napa Napa Refinery.
PM Marape said BPNG had recently run a file against Puma because of what it perceived to be an “unusual order” of foreign exchange (FX).
He said since the Napa Napa Refinery now operated by Puma was started by InterOil in 1997, there was an understanding that crude oil from Kutubu in Southern Highlands would be used to manufacture petroleum products, but this did has not eventuated and the refinery continued to import oil from Singapore.
PM Marape was accompanied to Singapore by Petroleum and Energy Minister Hon. Kerenga Kua, Finance and Implementation Minister Hon. Rainbo Paita and Public Solicitor Daniel Ropalgarea.
“We put it to them (Puma) that we do not tolerate our country and economy being held to ransom when the supply (of petroleum products) is suddenly cut,” PM Marape told Parliament.
“They said their (FX) requirements for them to purchase new fuel supplies was short as BPNG did not allow for commercial banks to supply them FX.
“That is because of some issues that BPNG felt that Puma needed to respond to.
“Puma did show me 13 issues that BPNG raised which they responded to.”
PM Marape said this morning, after arriving from Singapore, he met a team from the Central Bank led by Governor Benny Popoitai.
“They (BPNG) responded that they are working to resolve these issues,” he said.
“There are some regulatory issues that BPNG felt that Puma needed to respond to.
“The National Government, through Treasury and the Prime Minister’s Department, will try to arbitrate so that we do not stop the immediate supply of fuel.
“At the same time, we will ensure that the issues that Central Bank feels need to be addressed, are addressed through the due process.
“Needless to say, Central Bank is independent and operates at arm’s length from Treasury, while Treasury and the National Government control fiscal policy.
“The balance of these two essential policy spaces ensures that our economy is functional.”
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