ORDINARY people are asking one question today – how is it possible for our Government to be dictated to by a foreign-owned oil company?
And there are a few other questions that might be asked.
Among them is the issue of the Papua New Guinea economy.
The press releases surrounding this stand-off have been riddled with the phrase “we have no other option”.
As soon as readers see that time-honoured karamap, they know that a price rise will follow.
In fact, large oil monopolies such as InterOil have many other options; they are less attractive perhaps than publicly demonstrating that it can dictate to the PNG Government the terms and conditions under which the latter can access oil supplies for its people.
Our governments in recent times have been fond of flexing their muscles over arguably small issues to show that PNG has international clout and is a developing country to be reckoned with.
Now faced with a real challenge to its authority, the PNG Government is apparently powerless to act.
They “have no option” but to give in to the oil company demands.
So now we move one step further down the ladder.
What commercial sectors of our economy are likely to be worst affected?
The trucking and transport industry and the retailers.
“The increasing fuel prices will cripple our operations,” a trucking firm executive said.
They have already responded to the rise by sending their clients notice of a 15% rise in freight charges.
That would be regarded as a hefty increase overseas and particularly in developing countries.
And then comes the inevitable: “We are not able to bear the increase ... and will have to pass it on to our clients.”
A major food producer echoed the same sentiments, saying that his firm had been left “with little choice” but to increase the cost of their goods.
He predicted a rise in the cost of bread and biscuits and noted that the price of wheat “had already increased”.
The GM of a national retail chain said that “they would have no choice but to pass on the increase to their customers”.
At the end of the chain, there stands the vast majority of our people who are dependent on each link of that chain working smoothly in order to survive.
And as PNG Trades Union Congress president Michael Malabag was quick to point out: “This rise will wipe out the tax relief announced in the 2008 Budget.”
Mr Malabag also made the point that it was the people of the Highlands that would suffer most as they were “at the end of the freight chain”.
So are we to assume that our newly-elected government also has “no choice but to pass on the increase to the customer?”
In recent times, PNG governments have indulged in a good deal of huffing and puffing over issues that pale into insignificance when placed beside the oil supply confrontation.
This impasse calls for diplomatic skills and perhaps even the involvement of some good friends of PNG as intermediaries.
Not that PNG should appear to be discussing the issue as between two equals; we are a sovereign nation and the other party to this situation is a commercial profit making company.
But sometimes it pays to listen to others with more experience and not seek to achieve the desired goal mounted on a desert steed and brandishing silver revolvers.
PNG has many friends around the globe, including some who have interests in our country.
It would be to our benefit if our Government could come up with a solution to the present confrontation, one that boosted PNG’s international reputation rather than demeaned the effectiveness of our democratic processes and the true strength of our sovereignty.
We also have a number of highly skilled Papua New Guineans within the resource sector, people with a wealth of experience in dealing with top line negotiations and huge
multi-nationals around the globe.
Has their expertise been called upon in this situation?
If it has not, then we recommend the idea to the Government.
Whatever the ultimate outcome, the present situation is an intolerable compromise of Papua New Guinea, its people and all we stand for, and cannot be allowed to continue.