Updated on January 6 to include a statement from Puma Energy
Commercial air service in Papua New Guinea has come to a virtual halt as the country’s only fuel supplier—Puma Energy— lost access to U.S. dollars to buy Jet-A on the international market due to a dispute with the central bank. In a statement released Thursday, Air Niugini said the restriction applies to all airports in Papua New Guinea, including its base in Port Moresby, forcing the airline to cancel all domestic flights until Puma resumes fuel deliveries.
“We have done everything possible to ensure that this situation did not occur and that we could continue to support the people of Papua New Guinea especially as they return from their Christmas holidays,” said the state-owned carrier. “The airline can assure all our customers that we are completely up to date with our payments to Puma Energy and this regrettable situation is 100 percent outside the control of Air Niugini. We will continue to work with all concerned in order to ensure normal operations can resume as quickly as possible.”
Air Niugini warned that it might need to cancel international flights if the central bank can’t or won’t release U.S. dollars for fuel purchases. The Pacific region airline’s eclectic fleet includes two Boeing 767s and a Fokker 100 it uses on international routes such as Port Moresby to Cairns in Australia, Honiara in the Solomon Islands, and Port Vila, Vanuatu. De Havilland Dash 8s serve domestic destinations featuring what the carrier calls challenging terrain. It also operated a Boeing 737 to some domestic points such as Manus and Lae.
According to local press reports, Papua New Guinea's Prime Minister James Marape on Thursday asked the central bank to lift the restrictions for at least the near term while the sides work on a resolution to the crisis.
An earlier disruption of fuel supplies late last year ended on December 5, when the central bank injected U.S. currency into the market to allow Puma Energy to resume deliveries. "For several months we have been working closely and continue to work closely with various stakeholders to ensure sustainability flows of foreign currency, which is critical to buying fuel on the international market, Puma Energy said in a written statement to AIN. "Unfortunately, due to the limited availability of foreign currency in the commercial market, we were unable to continue maintaining the necessary supply of products to our customers. We will continue to work hand in hand with the relevant authorities to ensure security of supply for PNG."