Foreign exchange affects the market – Post Courier

BY PATRICK TOM

Supply to the domestic market remains impacted by the current shortage of foreign currency.

Puma Energy PNG Limited country manager Hulala Tokome told Post-Courier that rising oil prices will have a significant impact on Papua New Guinea this year.

Mr Tokome said last week that the benchmark Brent crude oil price had risen above US$100 (354K) a barrel for the first time since August 2014.

“The upward movement in oil prices is being felt around the world.

Most obvious is the heightened global uncertainty caused by Russia’s invasion of Ukraine,” he said.

“The physical market is tight as crude and diesel inventories are drawn to seasonal lows, and OPEC continues to underperform against its crude production quotas, adding to the tight offer.”

Mr. Tokome said locally that the price of fuel has increased by almost 0.50 toea per liter in the past two months and will most likely increase by 15 to 20 toea per liter in March.

“It also creates an additional problem for us as the continued shortage of foreign exchange (FX) in PNG is not good for us as we are unable to obtain the necessary foreign exchange from the market to pay for our crude supplies” he said.

“It has a huge impact on our business.

We cannot continue to maintain our business operations if we are unable to pay for the crude that we are at this critical point right now. »

He pointed out that one option would be to shrink and shorten the market, which would prove counterproductive and would not want to go that route.

“We want to ensure that we continue to maintain supply in the country, which is why we have strongly engaged with all market stakeholders in terms of our ability to maintain supply,” he said. declared.

“However, inflation and the cost of goods in the country, as you can already see in the shops, have increased significantly.”

The CEO of BSP Financial Group Limited also added that outstanding foreign exchange orders for imports, foreign service payments and capital payments have decreased significantly.