Gov’t in talks of establishing local fuel refinery

The Government is in serious discussions with Kumul Petroleum Holdings Limited (KPHL) and three multi-national petroleum companies to find solutions for the fuel shortage in the country, with a major announcement expected soon.

Prime Minister James Marape said the Government has been holding talks with ExxonMobil, Total Energies and Santos, together with Mineral Resources Development Authority and State-owned company KPHL, to look into the immediate import of fuel and a long-term solution in the construction of a locally-based refinery for downstream processing to secure the domestic market.

He said Papua New Guinea, under his government, was heading in the direction of downstream processing of its resources but Puma Energy's actions of recent months have forced the Government to act now rather than later in this area.

"Our fuel insecurity due to reliance on one or two suppliers is forcing the Government to urgently call on its State-own Enterprises and major oil companies operating in the country to finding solutions.
“The Government is now collaborating with Kumul Petroleum, MRDC, ExxonMobil, Total Energies and Santos to explore solutions that can ensure the country's fuel security, including aviation fuel and general fuel.

"We are leaving no stone unturned. What has happened under Puma must not be repeated. For far too long, this country has been victimized when, in fact, Papua New Guinea continues to export petroleum and gas to the world year after year. The irony is staggering.

"I am, therefore, pleased to note the progress the Government is making with our national development partners - ExxonMobil, Total Energies and Santos. 
"I am also looking forward to the moment when we can make the announcement on the immediate solutions we have worked out to resolve this relatively long-standing issue."

Papua New Guinea was plunged into an acute shortage of fuel at the end of last year 2022 when Puma Energy PNG Ltd announced it could no longer source crude oil and finished products because of unresolved foreign currency issues. 

This affected its supply of fuel to PNG, especially to the aviation industry where Air Niugini was forced to ground its flights and left the travelling public stranded for days as a result. 
The matter raised huge concerns on supply monopoly and the country's fuel security both for short and long term.

The issue is currently risen with fuel shortage all over the nation.

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