Hulala Tokome, the manager of Puma Energy PNG – Papua New Guinea’s largest fuel and energy provider – has claimed that crude price fluctuations directly influence the energy market’s import parity pricing. This is a pricing mechanism based on the opportunity cost of imported replacement products and is used to establish domestic sales prices.

Mr Tokome said the fluctuating price of oil is being felt across the globe. He added that diesel and petroleum supplies are nearing seasonal lows, and OPEC continues to underperform. Consequently, the physical market is tight, and the restricted supply issues are being exacerbated by limited crude output.

He said, “Decline in COVID-19 cases as well leading to strong pent-up demand and crude production below expectations will continue to drive prices higher in the medium term. Fuel prices surely do have an impact on any business operation.”

However, Mr Tokome confirmed that Papua New Guinea’s gasoline and energy supplies were unaffected, adding, “Our supply chain is working very well with fuel and energy supplies continue to be maintained in all regions of the country.”