Air travel disruptions will become norm if fuel supply dry’s out from Puma Energy
Air travel will be the most affected following a decision by the sole supplier of aviation fuel to put a temporary restriction lid on its supplies as of today.
As the countdown of the school year draws near, the decision by Puma Energy PNG Limited to restrict its petroleum products will result in flight disruptions at the two airlines who connect PNG by air.
PNG Air in a statement said “due to the implementation of restrictions by our jet aviation fuel supplier across the country, PNG Air scheduled flights are subject to late boarding and slight delays.
“The disruption of flights will be ongoing until the supply restrictions on jet aviation fuel are uplifted.”
Puma Energy managing director Hulala Tokome said the temporary fuel restrictions will be for an indefinite period, “in order to preserve the remaining stock on hand.”
He says BSP remains unwilling to maintain the company banking services or to constructively discuss solutions.
But in a media statement, BSP Financial Group CEO Mark Robinson said, the bank had given adequate time to Puma Energy to transfer its core banking to another commercial bank, before it closes the company’s account on 8th March 2024.
“The reasons for BSP’s decision are known to Bank of PNG and had been communicated to the government,” Mr Robinson said.
Meanwhile, Air Niugini acting chief executive officer Gary Seddon believes the decision by Puma Energy is in breach of its contract.
“Puma Energy should not use the Force Majuere clause to defend its decision because what has transpired does not fall under the category of that clause and must continue to supply aviation fuel as expected,” Mr Seddon said.
“Puma Energy was given nine months’ notice by BSP to close down all their accounts effective on the 8th of March 2024, this should have given Puma Energy ample time, to open new accounts with another bank.”
Mr Seddon further clarified “a Force Majeure event is an event beyond the control of parties to the contract and a party relying on such a clause must show that performing its obligation under an agreement has become physically or legally impossible and not just difficult and unprofitable.”
It is not the first time PNG will be under the mercy of Puma Energy fuel restrictions, and Prime Minister James Marape hinted on running back to Parliament to use provisions of the law to safeguard the country’s energy security.
Earlier this week the prime minister held discussions with BSP and the Central Bank [BPNG], “I have asked Central Bank to complete the long investigation that had gone on for the last two years to make a conclusion, and if there is no glaring concern, we asking for another transition period for Puma to operate, as we bring to finality what concern Central Bank has with Puma,” Mr Marape said.