Airlines struggling to sustain full operations with limited supply of aviation fuel

PNG Air is struggling to “sustain full operations” as the aviation fuel supplier has pulled the hose to refill its planes.

In a media statement, the airline which is majority PNG owned, advised customers, “while Puma [Energy] continues to withhold supply, [petroleum company] Pacific Energy is providing a daily rationing allocation which regrettably is not able to sustain full flight operations.”

Customers will feel the pinch, as flight cancellation will be unexpected, “PNG Air will not be responsible for accommodating disrupted passengers as limited fuel allocation throughout the network creates operational safety constraints and limits our ability to operate to all published schedules, at this time, refunds are not possible, impacted customers will be rebooked,” the statement reads.

To maintain its operations, PNG Air management is now making arrangement to import fuel directly from Australia, expected to arrive early this month.

State owned airline, Air Niugini has already gone abroad to import aviation fuel to support its operations.

 The airline Jet A-1 fuel import from Singapore arrived in the country this week.  

Cabinet short term measure to address the fuel shortage nationwide is invoking of Essential Services Act

Meanwhile, the executive government will impose emergency orders to address the nationwide fuel shortage.     

Cabinet has invoked provisions of the Essential Services Act which allows for the Government directives to fuel companies to comply or face penalties.

Prime Minister James Marape said “for short term measures, the head of state [Office of the Governor General] has issued the emergency declaration, and the Minister for Petroleum will direct Puma [Energy] to continue with fuel supply to all areas of fuel needs.”

This is despite Bank South Pacific's decision to close Puma Energy's business account- the prime minister's revealed that discussions with the country’s largest retail bank concluded, allowing Puma Energy to bank for the next 12 months.

Former Petroleum Minister, Kerenga Kua at the start of the year before resigning to join the Opposition said the executive government must not compromise Bank South Pacific’s reputation.

“Trafigura [Group] has serious questions internationally on money laundering, Puma [Energy] is a subsidiary of Trafigura, that’s why all international banks are shutting down Trafigura [bank] accounts.

“PM Marape keeps pushing Bank South Pacific to entertain Puma [Energy] here, to keep them operating when they already shut down in Australia and they sold out.

“All correspondence banks in the world transact foreign exchange with BSP, will then terminate their operations with BSP. This means they do that, BSP is dead, this country is dead too, because it's the only bank that has branches throughout the country,” Mr Kua said.

Meanwhile, the executive government will have to wait till May's sitting of Parliament to make amendment to laws to remove the monopoly enjoyed by Puma Energy.

With the invocation of the Essential Services Act now, Cabinet, acting on advice of the National Security Council, has implemented the following measures: use of Puma Energy’s Napanapa Refinery and related infrastructure by other suppliers for fuel storage and supply and appointment of Deputy Prime Minister John Rosso as Team Leader to administer all cabinet decisions relating to the fuel crisis.