PNG Prime Minister Hon. James Marape has asked both Bank of Papua New Guinea (BPNG) and Puma Energy to find solutions to the strenuous business relationship they have that is now becoming a national security issue and a cause for concern about functioning of the economy.
He said the case of Puma being unable to maintain the supply of fuel products to its customers was because of ongoing issues with BPNG, for which the country was being held to ransom.
PM Marape has asked BPNG, immediately after an urgent National Security Advisory Committee (NSAC) today (January 5, 2023), to find a short-term solution by lifting restrictions on Puma so that their supply of fuel products continue without compromising Central Bank’s fiduciary requirements.
“I want to also inform the country and business that today, the Bank has the highest-ever level of foreign reserves (FX) of more than K13 billion – more than enough for a year,” he said.
“That’s because my Government’s fiscal policies assisted 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 assisted 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.
“This issues between BPNG and Puma have been going on for some time and the Executive Government will have a holistic look at the entire saga.
“I, as Prime Minister, believe that businesses should be operating with ease, and when it comes to FX, they should be accessing FX.
“If it is a legitimate transaction, it is the Central Bank’s duty to ensure that the requirements of FX are met, with little or no impediments.
“Without compromising Central Bank’s role in ensuring that transactions are legitimate and proper, I appeal to it to exercise wisdom and not just be a policeman, but use monetary policy and the Bank as an incubator of economic activity in PNG.
“The Government is also looking at the arrangement with Puma, whereby they have a monopoly in PNG, and does not want the country to be placed in a dangerous security situation.
“I ask the Central Bank to clear the order for the supply of fuel products by Puma to continue, in the meantime, as we find permanent solutions. I will also set up a State team to look deeper into this saga between the Central Bank and Puma.”
Statement
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