Bank of Papua New Guinea (BPNG)

“So Puma needs USD to buy Kutubu crude and that's exerting pressure on PNG banks and BPNG to supply USD to Puma.”

Mr Bakani was responding to this newsroom for clarification on the recent fuel saga between Puma and Bank of PNG which affected the supply of JET A1 fuel to airplanes and a cancellation of flights.

Bakani told this newsroom that there is no agreement between Puma and supplier of Kutubu crude oil for purchases in Kina by Puma.

He stressed that this is one major area that needs to be reviewed for Puma to purchase Kutubu crude oil in Kina.

Prime Minister James Marape in a statement clarified the issue in regards to the fuel supply by Puma Energy.

“However, in this case, BPNG may have stressed Puma to the point that they are unable to supply fuel products due to unavailability of matching US dollars for fuel imports.

“I have, immediately after today’s NSAC meeting, written to Central Bank asking them to find solutions to the issues with Puma without compromising the role they play in ensuring that legitimate transactions take place.

Prime Minister Marape in a statement said the case of Puma being unable to maintain the supply of fuel products to its customers was because of ongoing issues with Bank of PNG (Central Bank), for which the country was being held to ransom.

PM Marape has asked BPNG, immediately after an urgent National Security Advisory Committee today (January 5, 2023), to find a short-term solution by lifting restrictions on Puma so that their supply of fuel products continue without compromising Central Bank’s fiduciary requirements.

“Without compromising Central Bank’s role in ensuring that transactions are legitimate and proper, I appeal to it to exercise wisdom and not just be a policeman, but use monetary policy and the Bank as an incubator of economic activity in PNG.

“The Government is also looking at the arrangement with Puma, whereby they have a monopoly in PNG, and does not want the country to be placed in a dangerous security situation.

“I ask the Central Bank to clear the order for the supply of fuel products by Puma to continue, in the meantime, as we find permanent solutions.”

Prime Minister James Marape made these remarks when welcoming and supporting the Bank of China application for a commercial banking license from BPNG.

“They will have to apply for it from the BPNG and meet the prudential standards set by BPNG which is clearly laid out in their website.”

Marape said the entry of Bank of China into PNG would also enhance the Government’s plans to strengthen and deepen the trade and investment relationship between China and PNG.

Marape also encouraged the Bank of China to apply for a full commercial banking license from BPNG to set up and operate a full banking network in PNG.

The Bank of China operates in 60 countries around the world and is the world’s fourth biggest banking group.

It has a diverse portfolio of investments which also includes investments in airline companies.

BPNG will be part of the Human Rights Activism under the 2021 theme, ‘Unite Against Gender Based Violence and COVID-19. One Voice, One Purpose, One Action.’

BPNG Governor, Loi Bakani said the United Nations Human Rights Activism theme for 2021 is relevant to PNG.

“Particularly since so many of our family members, friends and co-workers are directly affected by COVID-19 and too many women and children in PNG continue to be victims of gender-based violence.”

The Central Bank’s Monetary Policy Statement by Governor, Loi Bakani explained that for PNG, the supply of foreign exchange is mainly from export proceeds, Government external loans, grants, and foreign direct investments. 

The demand for foreign exchange are mainly for import of goods and services, external debt servicing, dividend and income repatriation, and other remittances. 

The term of payment of physical goods other than non-goods (service, dividends, transfers and capital related-flows) usually allows for up to two months before final remittances are done. 

The booklet is a one-stop reference guide with detailed information on loan products available at licensed banking institutions, including client requirements and contact details of the institutions. The guide will assist individuals and business to access appropriate loans to start, develop and expand their businesses.

This was revealed in the Bank of Papua New Guinea’s Quarterly Economic Bulletin for 2019.

According to the Bank of Papua New Guinea’s Quarterly Economic Bulletin for 2019, most prices and production of agricultural commodities fell, affecting foreign exchange inflows into the domestic market.

Its spill-over effect to the non-mineral sector was evident as import orders continue to remain high. 

During the quarter, the weighted average kina price of PNG's export commodities, excluding LNG, increased by 3.3 percent.