WHY DOES OIL-RICH PNG PAY TOP DOLLAR FOR FUEL?

Editorial

PNG Post-Courier

PORT MORESBY, Papua New Guinea (Dec. 11) - There must be somebody in the Government who pays for his own fuel and is feeling what the rest of the nation is grieving about with petroleum prices.

Is there somebody in Cabinet who is standing up against the InterOil monopoly when it argues for a special deal on supplying our nation with fuel?

It doesn’t look or sound like it. Not a word has been said about the issue of fuel prices since InterOil stamped on the authority of the Independent Consumer and Competition Commission a fortnight ago and ran directly to the Government.

Now the ICCC has apparently been cowed into submission and has merely announced the deal done between the National Executive Council and InterOil, with the Prime Minister’s signature on the paper.

The prices of petrol, diesel and kerosene in Papua New Guinea have soared dramatically, at a time when the world prices of fuel have fallen. It’s dropped from nearly US$100 to about US$87 a barrel this week.

If a foreign company can charge the prices it likes, while it is still in negotiations with the Government to vary the exclusive contract it signed a decade ago, it’s a weird sort of system we are enmeshed in.

Most people were proud when they heard PNG was to get its own petroleum products refinery. This was downstream processing in a sophisticated industry, when we can’t even value add our coffee, cocoa and copra!

So we went into a 30-year monopoly with a Canadian company we had hardly heard of, apart from overseas news reports suggesting links to the gigantic Enron collapse in the U.S. some years ago.

Now the government price watchdog is being ignored and then squelched, while InterOil sorts out our government leaders and has a new price fixing formula accepted. And our fuel consumers are lead by the nose to the petrol pump to pay much higher rates.

There are many in the industry who do not agree with the way this affair has been handled. They believe that Papua New Guinea consumers are in effect being made to pay for InterOil’s overseas commitments.

We are an island nation, swimming in oil. Yet after a promising start with our own refinery, we are now seeing our own petroleum needs met with imported fuel.

What’s happened to the local refinery and why are we not using PNG petroleum?

If Moresby drivers find the new prices expensive, how will the motorised canoe owner of New Hanover or Alotau find things? Or the PMV bus owner of Mount Hagen? Wait for the price ramifications.

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