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May 18, 2021
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Puma Energy Dealing with Forex Challenges in PNG

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By Bethanie Harriman – EMTV News, Lae

Puma Energy Country Manager, Jim Collings, says the company is talking to the national government about finding solutions to the foreign currency pressure that the company is facing.

Adverse effects on the operations of Puma Energy could cause a drop in fuel supply, and a spike in fuel costs.

Despite the economic challenges faced by the country, Puma Energy, like many other companies across various sectors, has continued to invest heavily into the PNG economy.

They’ve spent up to US$80 million in building a supply chain and spending in other areas.

“So we have invested, what that basically means is of the total strategic storage in the country, Puma Energy is supplying somewhere close to 90 per cent,” says Collings.

For other companies it is a matter of survival simply to keep operations going.

In Lae, manufacturer KK Kingston is also managing risks as the company deals with the short supply of foreign currency.

It is doing it without the support enjoyed by companies in the energy sector.

“To be honest we have tried to engage with the government, but thus far, we have found it very difficult to find someone who is willing to talk to us, and help us, so we are pretty much dealing with it on our own, and the way we are doing that is by way of rationing payments, and schedule payments and work within the limits of what we can get at the commercial banks.

“That means that every month, some suppliers go unpaid and our debts overseas slowly get bigger and bigger, and it’s not because of a lack of kina, it’s because we can’t get the Australian and US Dollars as and when we want,” says KK Kingston Chief Executive Officer, Michael Kingston.

The debt levels of businesses heavily dependent upon imports are slowly rising.

Some companies are doing better than others, like Puma Energy, who have made strategic decisions to counter the effect.

“There has been a fundamental shift between ourselves and other importers, the government and government agencies, there is a real collective effort to make sure we get through this issue,” says Collings.

Businesses operating in Papua New Guinea are now making decisions about investment against policy, asset allocation, and the overall balancing of risk against performance.

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