Emmanuel MAIPE

Fuel consumers in the country will have to dig little deeper into their pockets this month after the Independent Consumer and Competitions Commission (ICCC) announced that price for all petroleum products will increase on average right across the country, starting on Thursday 08th February. According to the ICCC, these retail price increases are mainly attributed to the average increase in international crude oil prices in the month of January 2024. The average crude oil price increase was mainly attributed to increased demand from China and the United States, and disrupted supply of global crude oil from the Middle East. The domestic retail fuel prices for February are inclusive of the Import Parity Prices (IPPs) or the imported costs for each petroleum product, domestic sea and road freight rates for the first quarter of 2024, the annual wholesale and retail margins for 2024, and the Goods and Services Tax (GST), including the applicable excise duties, among other parameters. For the fuel prices for Port Moresby residents, after adding all the various cost components, the maximum retail price movements for petrol, diesel and kerosene will increase as follows; Petrol, K4.41 per liter Diesel, K4.24 per liter Kerosene, K3.96 per liter Retail prices in all other designated centers in the country will change according to their quarterly approved domestic freight rates for the first quarter of 2024, and their respective annual retail margins for this year. For all centers, the maximum retail prices for each regulated petroleum product will all increase on average consistent with the increases observed for Port Moresby city. Meanwhile, as part of the ICCCs enforcement and compliance of fuel prices, the Commissions Investigative Officers will conduct inspections to all service stations to ensure prices of declared petroleum products comply with the allowable maximum prices.

Residents and business houses in a large part of Port Moresby city and parts of Central province woke up this morning to water shortage or no water supply at all because vandals decided to destroy the air valve on a water trunk main at Waigani. According to Water PNG Limited, the incident occurred over the weekend along Pitpit Street where the act of vandalism by the community led Water PNG having to shutdown water supply to a large area with these areas continuing to face water disruptions since yesterday, Monday 05th February. The areas affected are Gerehu stages 1 to 7, Rainbow Estate, the Papua New Guinea National Research Institute, Baruni village, Motukea, Porebada and Roku villages, the University of Papua New Guinea, Tokarara, Ensisi Valley, Burns Peak, Murray Barracks, Hohola 1 to 4, North Waigani, June Valley and Wagani Drive. "The immediate shutdown will allow Water PNG to carry out repair works to our vandalized water valve on our water trunk along Pitpit Street (outside Telikom Compound). Water supply to the affected areas will be restored once the maintenance work is complete, " Water PNG said in a notice. The State owned water company also stressed that vandalism to its properties is a crime and is totally unacceptable and anyone caught doing it will be prosecuted to the full extent of the law. Water PNG also sincerely apologizes for the inconveniences caused.

The city of Port Moresby faced another issue with the supply of fuel today when vehicle owners discovered that most of the service stations were low on supply, but the reality is that this fuel crisis situation could prolong. This is because of the current situation faced by Puma Energy PNG with the closure of its accounts with the BSP Financial Group Limited (BSP), limiting further the fuel distributor’s ability to purchase fuel from overseas. The Chairman and Managing Director of Puma Energy PNG Group of Companies, Mr. Hulala Tokome initially indicated that this would happen after it was clear that Puma’s request to reopen its accounts with BSP was denied and that Puma would have to open its accounts with another commercial bank in the country. In a letter to the Chief Secretary to the Government dated 19th January 2024, Mr. Tokome stated, “As a result of BSP’s confirmation yesterday that they are not willing to reopen our accounts, we regret that we are left with no choice but to imminently begin the phased reduction of our operations and supply. We confirm that for the time being, the actions which we may take to reduce our business will, with time and effort, be reversible, should an acceptable banking solution be found.” Since that time on, Puma was left to make the transition from BSP to another commercial bank with the deadline for its accounts closure with BSP set for the 08th of March 2024, but that dead line was extended after BSP gave 90 days extension for the accounts closure after the prime minister intervened. However, at this stage it is not clear how long the phased reduction of fuel supply will continue as Puma has not come out clear as to when its accounts with a new commercial bank will be opened and business can resume. For how long it will take, this is not clear either as the Puma management in the country is yet to make a statement, and it is understood that Mr. Tokome would not be speaking to the media either until he is fully briefed on the next phase of action by Puma Energy. Nevertheless, while this is going on, the residents in cities like Port Moresby could be facing a longer period of fuel rationing and fuel shortage situations unlike previously experienced.

About 576 security personnel have been paid out their State of Emergency (SOE) operation allowances already with the remaining 400 officers from the National Capital District (NCD) to be paid theirs this week. That was the confirmation from the Police Commissioner David Manning in a statement which he released this afternoon. Manning said the remaining payments are being processed by the Finance Department and BSP. He explained that the Royal Papua New Guinea Constabulary (RPNGC) Human Resource Division stressed the need to process the allowances in two tranches because of administrative delays by the Zone Commanders in submitting relevant paperwork on time. As a result, and after the allowances are paid out to the remaining personnel, the respective Zone Commanders will be required to provide details on why delays occurred and potentially face administrative action. Commissioner Manning stressed that the country expects police officers to get out and do their duties and the same is expected of the Zone Commanders and administrative staff, who should be ensuring their personnel are properly supported. The Police Commissioner later expressed confidence in the command of the interim NCD/ Central Commander, ACP Peter Guiness and reinforced his expectation that police deliver upon their duty first and foremost, while exercising patience as administrative processes occur.

The National Capital District (NCD) Governor Powes Parkop, has welcomed the opening of the new Hilton Hotel Residential Apartment by Star Mountain Plaza, saying that this shows that there is still very much confidence in doing business in the city of Port Moresby, despite recent events. While delivering his speech at the official opening ceremony at the Hilton Hotel in Port Moresby last week Thursday 01st February, the governor stressed that this is a time to rebuild and recover when refereeing to the Black Wednesday riots last month that saw the destructions of major supermarkets and warehouses by looters. He stated that the opening of the new apartment building plus other upcoming projects in the city, shows the commitment by corporate houses to continue investing in business activities, create employment and contributing to the development of Port Moresby city and the country as a whole, which is something that he greatly appreciates. “I believe we can all do that,” said the NCD Governor. “Since the 10th of January, I’ve had the privilege of launching Modern Bay Apartments at Lowes Road, a massive investment.” He also revealed that he had had discussions with Sea Park developers to make a big investment in the form of a 21 Storey apartment building. All these he said are all great signs that business confidence is still there. “So, there is a lot of confidence still in our capital city, there is still a lot of confidence in our country,” Parkop proudly said. “I think in the next eight years, I would like to think that all our projects come on, our golden time is still a head of us.” The governor later congratulated the Star Mountain Plaza, the project area landowners and the other stakeholders that made it possible for the creation and the opening of the new Hilton apartment building.

About 272 public servants nationwide who are retiring will be finally paid out their entitlements under batch one of 2024 after the Deeds of Release (DOR) for these public servant retirees were approved and sent to Treasury for the release of funding, with a date to be set for them to be paid. Department of Personnel Management (DPM) Secretary, Ms. Taies Sansan, said that this is the second batch of retirees for year 2023; however, due to circumstances beyond our control, they will receive their retirement payments this year as the first batch of 2024. The 272 retirees from 21 government agencies will be paid out a cost of K17.5 Million. “The retirement exercise has been on-going since 2019 and our retirement team validated these 272 public servants who have reached retirement age to be retired and paid out of the Public Service,” said Ms. Sasan. Once these public servants get paid out their entitlements, their names will be terminated on the government’s Alesco Payroll system. “Retirement is a normal attrition that is undertaken by the agencies to retire their aging workforce and submit names to DPM for file checks and validation processes.” Secretary Sansan said the DPM has taken a whole of government approach to administer the retirement exercise and retire public servants in collaboration with Treasury and Finance. “The approach we have taken to identify retirees is through the Alesco payroll, and then we write to the agencies to confirm and submit names of those who have reached the compulsory retirement age to DPM.” Secretary Sansan said retiring the aging public servants has been heavily dependent upon availability of funding to pay them out and that is why many have remained on the payroll until such time funding is available to pay them out. The Government has been helpful as since 2019, a total of K234 Million has been expanded to pay out the retirees. “I thank the government for its commitment to this cause,” said the DPM Secretary. Ms. Sansan is appealing to all government agencies to play their part in retiring their ageing workforce, to fast track the retirement process for 2024 as funding has been made available in the 2024 Budget. Meanwhile, the 21 agencies whose officers are being retired are: · Autonomous Region of Bougainville (1), · Central PA (2), · Central PHA (1), · Cocoa Board (5), · Department of Implementation and Rural Development (2), · East Sepik PA (33), · East New Britain PHA (34), · Enga PA (25), · Enga PHA (13), · Madang PHA (42), · NBC (16), · NCD PHA (1), · NSO (4), · PNGDF (37), · Police Uniform (2), · Public Solicitor’s Office (1), · Simbu PA · Simbu PHA (2), · SHPA (2), · SHPHA (26), and · WNBPHA (15).  

The Star Mountain Plaza has officially opened the stage two of the Hilton Hotel project- the Hilton Port Moresby Residence, which is another milestone achievement for the resource project area landowners from Western and Southern Highlands provinces. The Chairman of the Petroleum Resources Kutubu, Mr. John Kapi Natto when speaking at the official opening of the Hilton Residences and the launching of the stage three of the project on Thursday 01st February in Port Moresby, said the opening is a milestone for Star Mountain Plaza. Mr. Kapi Natto when giving a brief on why they started off the project almost a decade ago, said the idea came about to make an investment for the landowners and also to contribute to the development of the country. “When we under took this project eight years ago, not only was it our aspiration to deliver a world class facility, but to help the government to host the APEC meeting and leaders’ summit in PNG for the first time in 2018,” said Mr. Kapi Natto. “It also marked the coming of age of the hospitality industry in PNG, the introduction of the Hilton Hotel brand to the market for the first time in our country.” However, he said the road to the development of the Star Mountain Plaza at Hohola in Port Moresby was not an easy one with many criticisms and challenges faced, like the COVID- 19 pandemic. But he said they overcame the obstacles, which was a credit to the hard work and commitment of everyone involved. He said the significant of the Star Mountain Plaza is that it is a long term investment that will someday look after the landowners and their generation whenever the natural resources run out. “This investment will be a legacy for every one of us and our future beneficiaries who will be proud of it.” The Chairman then went on the thank the people who contributed to the development and success of the Star Mountain Plaza so far, starting off with the Boards of the Mineral Resource Star Mountain, Mineral Resource Ok Tedi, Mineral Resources CMCA Holdings Limited and his own Petroleum Resources Kutubu. He also thanked the National Government for the partnership, the Mineral Resources Development Company (MRDC) for the support and the banking partners for the faith in providing the finance to ensure that the project is delivered. Meanwhile, the new Hilton Port Moresby Residences was opened by Prime Minister James Marape by cutting the ribbon.

The Local Level Government (LLG) Election is scheduled to take place this year but it is yet to be approved by parliament that the LLG Presidents will be elected by the elected Ward Councilors and not by the people as previously practiced. Last year the Minister for Provincial and Local Level Government Affairs, Soroi Eoe proposed the change of the voting process from the people to the elected Ward Councilors and following meetings and government caucuses, most of the Members of Parliament agreed for the change in the system and to be applied this year in the LLG elections. However, this week the office of the minister confirmed that this change has not yet been approved by parliament going forward and with less than five more months to go before the LLG elections are held in the country, the question now remains as to whether this change to the election process will be ratified in the upcoming parliament session. The whole election process now awaits upon the official go ahead by the National Parliament, otherwise it’s going back to the old process. Meanwhile, the LLG elections will be hosted in June as per the schedule released last year, with the Election Writ to be issued on Thursday 27th June at 4pm, opening up the nominations. The Nominations will close on Wednesday 3rd July at 4pm. Polling will start on Saturday 24th August and ending on Friday 6th September and the Writ to be return on or before Thursday 27th September 2024. The Nomination period will be for 7 days, Campaign period for 8 weeks, Polling period for 14 days and Counting period for 21 days.

The new Defence Minister, Dr. Billy Joseph is expected to present the Report of the General Board of Inquiry (GBOI) into the Papua New Guinea Defence Force (PNGDF) training accident last year in the Central province, to cabinet soon for further deliberations. The minister, after he was presented with the Report in Port Moresby this week by the Chairman of the GBOI Col. Bruno Malau, said that it is important that this report is cited by the government to see what had happened and how to address it going forward. The training accident, which occurred on the 04th of July 2023 in Kupiano, saw one soldier dead and several others wounded including a civilian when live rounds were apparently used instead of the standard blank rounds used during military trainings. "Such a tragedy in peace time training of the PNGDF requires an investigation to allow for our people to understand the circumstances leading to the tragedy, and enable closure to the lives of friends and relatives of the deceased," said Minister Joseph. The Minister informed the Board of Inquiry members and other dignitaries at the presentation ceremony at the APEC Haus that he will take the General Board of Inquiry Report and present it to the National Executive Council (NEC) for its deliberations as required. Meanwhile, the minister thanked his predecessor, Mr. Win Bakri Daki, for his wisdom in commissioning the General Board of Inquiry into the unfortunate incident. He also on behalf of the government thanked the Chairman, and his committee members; Jena Kuliniasi, Sumasy Singin, Emmanuel Gorea, the Secretariat and all those who came forward to provide evidence or testified during the inquiry.

The Member for Sinasina- Yongamugl, Kerenga Kua is concerned that fuel distributor Puma Energy PNG Limited continues to hold the country to ransom with its tactic of rationing fuel and even shutting down its services when faced with third party issues regarding its access to Forex to purchase fuel. Speaking at the recent press conference in Port Moresby city after his official resignation from the government, the former Petroleum and Energy Minister said while he was an active minister in the Marape- Rosso Government dealing with Puma, he warned the fuel company to refrain from doing that and speak to the authorities, including the government to resolve the matter first instead of opting to stop its services to get what they want. “They have a tendency to shut down operations before talking to authorities and sometimes, I think it's deliberate,” said the Member of Parliament (MP). They know that and I think in the past they deliberately exploit that. I told them don’t shut down, before you shut down you talk to us first and if we disagree, you can get a court order.” "Once you stand on the basis of a court order, you are acting with the authority of the court. Don’t do this on your own coalition, unilaterally make decision, impose on the public and then force the government’s hand.” Mr. Kua said this action could be seen as holding the government to ransom, which is extortion and sometimes, it could be seen as treason because of what this action could create, like a civil unrest that could lead to a potential bring down of the government of the day. “They got to be careful, they got to demonstrate their corporate citizenship in this country.” He said the country is now facing another such situation with Puma opting to rationing its fuel supply and restricting its services in light of the closure of its accounts with BSP, and even though they are in the process of transitioning to another commercial bank in the country to open their accounts, Puma continues to restrict its services. Nevertheless, the MP did give his recommendations to the government on handling this matter carefully going forward, upon his exit as the Minister responsible for Petroleum and Energy. His recommendations include the government to remain focus on this issue and fund Puma properly to avert another round of fuel emergencies, and for the government to massage Puma into selling out its entire PNG business to a third party because Puma’s business has become unacceptable to the Bank of Papua New Guinea and the major commercial banks in country.

The deadline for the closure of Puma Energy PNG bank accounts with the BSP Financial Group Limited (BSP) has been extended to give enough time for Puma to transit to doing business with another commercial bank. At the request of the National Government, BSP has agreed to provide Puma a further 90-day extension from the 8th of March, 2024, for the closure of its accounts. This action was in response to a request dated 25th January, 2024, from Prime Minister (PM) James Marape. This extension has been granted on the basis that additional time is required for Puma to complete transferring its banking requirements to another commercial bank in the country. Another reason for BSP to grant this extension was the consideration of the disruptions in normal business operations for other banks, financial institutions, and the business community at large following the civil unrest that affected many parts of the nation between the 10th and 11th of January. As a licensed bank in Papua New Guinea, BSP has an obligation to strictly comply with all regulatory requirements. BSP has complied with its regulatory and contractual obligations in making the decision to cease banking relationship with Puma. Puma has been offered all assistance to ensure a smooth transition to a new bank as part of BSP’s commitment to minimizing the impact on the people of PNG. BSP has urged Puma to act responsibly during this extension period and finalize alternate banking arrangements.

The Member for Sinasina- Yongamugl, Mr. Kerenga Kua after resigning as a State Minister from the government yesterday, gave a stunning revelation of the Puma Energy PNG’s situation and its issues that are being experienced in the country, even right now. Mr. Kua revealed that while as the Minister for Petroleum and Energy in the Marape- Rosso Government, he had recommended that Puma Energy PNG closes its operations in Papua New Guinea because it is bound to be doomed due to its failing situation with regards to the closure of its bank accounts with the major commercial banks and its inability to purchase fuel and satisfying the domestic demand for fuel due to Forex issues. “This problem emerged in July last year and an emergency was declared on fuel supply in Papua New Guinea under various legislations I was responsible for,” said the Member of Parliament (MP). “I took it through and we tried to understand what the underlining reason for the disagreement between the commercial banks, Bank of Papua New Guinea (BPNG) and Puma as the supplier of both general and aviation fuel.” What was discovered was apparently something to do with Puma’s invoicing system to BPNG for the US Dollars foreign currency, which Mr. Kua said was one of the main problem. “The Central Bank has got questions about the integrity of those claims of foreign exchange, those invoices. On top of that the local commercial banks are also under pressure from correspondent banks from overseas.” He explained that every bank in the country has a relationship with an overseas company, it’s an official relationship called the Correspondent Bank Relationship, which is to make sure that international transactions are conducted through that relationship. “The pressure for the local banks to shutdown Puma’s accounts is also coming from the overseas correspondent banks, we don’t know the grounds but the pressure is there.” The MP said ANZ bank and Westpac bank have closed Puma accounts already and Puma is operating on its BSP account only, but BSP has given notice to close that account. That notice was given last year on the 08th of June to Puma that the account will close on the 08th of September 2023. “But when we introduced the state of emergency, I on behalf of the government asked for an extension and it was extended to the 08th of March this year. So, Puma’s ability to operate is still there up to the 08th of March,” said Mr. Kua. “Now in the interim, we’ve tried to ask Bank of Papua New Guinea and BSP to reconcile their difference and I can tell you now that it’s irreconcilable. Also, the correspondent banks demands for the closure of Puma accounts are also there. So, BSP has no choice and apparently Bank of Papua New Guinea has no choice, so what do we do?” Kua said Puma is running out of options and he recommended that the fuel company sell out. “I said it’s time to shut down your business in PNG. Do it in an orderly manner, and don’t interfere with supply (fuel supply) itself. Maintain your orders, maintain the distribution, at the same time you put your business on sale.” He concluded by saying that Puma Energy shouldn’t hold the country to ransom with the fuel supply rationing or stoppage, and that it should start making efforts to transit and allow another distributor to take up the business going forward.