One of the main fuel suppliers in the country, Puma Energy will reduce its operations and the supply of fuel to its customers leading up to the closure of its Bank accounts by Bank South Pacific scheduled on the 8th of March 2024.
“The decision comes after eight months of engagement with BSP and various authorities, including the PNG Government, Bank of Papua New Guinea (BPNG) and others. BSP has been unwilling to share their reasons for the planned closure of the bank accounts or to constructively discuss solutions. Puma Energy has received no concrete evidence of wrongdoing from either BPNG or BSP in relation to its BSP accounts,” Puma Energy stated.
However BSP responded that the reasons for this decision are known to the Bank of Papua New Guinea and the Financial Analysis and Supervision Unit have been communicated to the Government.
BSP Group CEO, Mark Robinson said they have complied with the state of emergency orders and has given Puma Energy ample time to secure alternative banking arrangement until the 8th of March.
Puma Energy explained that BSP is the only Bank that can provide access to FX needed to fully operate and supply fuel in the country. The decision by BSP to close Puma Energy’s account will affect their business operation and fuel supply in the country.
“Puma Energy is amongst the largest consumer of USD, with an ongoing requirement of approximately US$50 million per month, BSP is currently the only bank out of our existing banking partners able to provide access to the financial services and FX needed to fully operate and supply fuel in PNG.
“As a result, we are unfortunately forced to begin to reduce our operations in order to match the FX access of the remaining banking services that we have in PNG. Puma Energy PNG is taking these steps now as we are currently selling product that we will not be able to pay our suppliers for once our accounts with BSP are scheduled to be closed. In the interim, Puma will prioritize the supply to emergency services,” Puma Energy explained in a statement.
This issue has affected the airline operators as well, in the likes of Air Niugini and PNG Air since Puma Energy is the only supplier of Jet Aviation fuel that services the airline operators.
PNG Air start rationing fuel today (27th of January) and this will result in flight delays and late boarding and will be revert back to normal operations until and when supply of jet aviation fuel restriction is uplifted.
Air Niugini Management stated that, the restriction of fuel supply will affect their business operations as well as their agreement with Puma Energy.
“A failure to supply fuel in accordance with the Agreement will amount to a clear breach of the Agreement. Such breach will result in us suffering substantial loss and damage, and, we will hold you (Puma) liable for such loss and damage,” Air Niugini CEO Gary Seddon said.
The Chairman and Managing Director of Puma Energy Hulala Tokome said: “We are deeply disappointed to reach this point despite our best efforts over the past eight months. We have requested the Government of PNG to convene a task-force so that the Government can ensure security of supply and limit the impact on the community and economy.
“Puma Energy remains committed to PNG and open to dialogue with all stakeholders to find an amicable and sustainable way forward to return to full operational scale and to secure fuel supply for the country,” he said.
Meanwhile Prime Minister and Treasurer James Marape said the government will look for alternatives to solve this issue so that it will not affect business operations and the economy of the country.
