PUMA Energy PNG Ltd’s Napa Napa refinery is at risk of closure by the end of this month, says country manager Hulala Tokome.
Tokome told The National that this would be a result of the Government’s proposed customs tariff on imported refined fuel products.
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| PUMA Energy PNG Napa Napa Oil refinery at risk of closure, says executive . Photo Napa Napa Oil Refinery in Port Moresby |
The proposed changes will see a 5 toea reduction tariff for refined diesel and petrol which the Government says will encourage competition in fuel industry. Tokome said the closure of the refinery would impact 150 jobs and major losses in taxes to the state.
“The removal of the import tariff would result in importers paying less taxes in country and risk the viability of the Napa Napa refinery operations including the jobs it supports,” Tokome told The National.
“The import tariff was introduced (in the 2018 National Budget) for two main reasons, it supported the viability of the Napa Napa refinery and the approximately 150 skilled manufacturing jobs and meant importers paid taxes in country rather than keeping profits offshore,” he said.
“The import tariff has never been passed on to the consumer as the Independent Consumer and Competition Commission (ICCC) controls prices.
“The ICCC price formula which limits the maximum price at the retail pump does not have the import tariff included. “So increasing or decreasing the import tariff has no impact on the price at the pump.
“The proposed changes puts a risk on the viability of the refinery (Napa Napa) beyond the end of this year.”
It is understood the main importer of petroleum products into PNG is ExxonMobil.
Puma Energy is the main importer of crude oil which is then processed into petroleum products which encourages downstream processing which in turn creates jobs in country with taxes being paid in country.
Puma’s current market share in the country is around 55 per cent.
Tokome also said they looked forward to working with the Government to find a solution that continued to protect consumers as well as PNG’s indigenous refining capacity. The National was unable to get comments from the Independent Consumer and Competition Commission.
The National / Pacific Mining Watch
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