PNG businesses concerned over impact of global conflict
Business houses in Papua New Guinea are raising concerns about the potential impact of the ongoing global conflict involving the United States, Israel and Iran.
NBC News spoke with representatives of the Eliseo Group Limited in Port Moresby about how the escalating tensions could affect local businesses.
The company has called on the government to take necessary measures to assist businesses should the situation worsen.
Their concerns stem from possible disruptions to global oil and gas shipments, which could lead to higher fuel prices and market instability.
At the centre of these concerns is the Strait of Hormuz in Iran, the only sea passage linking the Persian Gulf to the open ocean.
According to international reports, the strait is one of the world’s most critical energy routes, with about 20 percent of global seaborne oil trade passing through it each year.
If the route were to be closed as a result of the conflict, global fuel supplies could be severely disrupted, forcing many countries to seek alternative supply routes.
Businesses in PNG are also worried about the ripple effects such disruptions could have on their operations.
The Eliseo Group Limited, which has operated in Port Moresby for more than 15 years, says the situation is particularly concerning given the country’s unreliable electricity supply.
Eliseo Deputy Group CEO Aaron Cui shared his concerns.
“In the last two or three days I have been concerned about this issue. I was worried the gas and oil price might go up, really worried about the fuel supply because the power supply here in Papua New Guinea is problematic. I am really concerned about the fuel supply for our gensets and how this might affect our business operations.”
Mr Cui said although the company has its own fuel storage, the reserves would not last long if supply disruptions occur.
“We have quite a good storage of our own fuel, but that will not last long. So, I hope the government will do something about it.”
Meanwhile, the national government says it is closely monitoring developments arising from the escalating conflict involving Iran, Israel, and the United States, particularly the potential impact on global fuel prices and the domestic economy.
Prime Minister James Marape earlier stated that the government recognises that rising global oil prices could trigger imported inflation, especially for fuel and essential goods that PNG relies on from overseas.
Mr Marape said that if fuel prices rise to extraordinary levels, the government is prepared to intervene and subsidise fuel prices to protect the economy and the people.