BARNABAS ORERE PONDROS
PAPUA New Guinea has failed to use its rich energy reserves to provide competitive and affordable energy, as a result it will continue to be buoyed by global crude oil prices, thus, the cost of living and doing business will be increased, the PNG Manufacturers Council said.
“I affirm that any increase in fuel charges represents a real and direct increase in both the cost of doing business and living,” the council’s chief executive officer Chey Scovell said yesterday.
Mr Scovell said this as the Independent Consumer and Competition Commission announced that petrol would rise from K2.85 to K3.07, diesel from K2.25 to K2.45 and kerosene from K2.17 to K2.33 per litre.
Petrol will increase by 12.2%, diesel (10.3%) and kerosene (8.3%).
Mr Scovell countered, saying, “put simply when we see increases like this we see an equal increase in the cost of doing business”.
The brunt of it all, Mr Scovell said, would be felt by consumers because firms were likely to pass the increased costs to the end of the supply chain
“Manufacturers use generators and vehicles that transport their goods around the nation (and) increases in the cost of fuel must either be absorbed or pass on to customers,” he said.
“For businesses that are highly profitable there is more scope to absorb costs, but the further a business moves away from their required earnings the greater the need to pass the cost on to its consumers,” he said.
He also raised concerns that the Government must look into using the nation’s rich energy reserves and raw material export earnings to offer competitive and affordable energy for consumers.
“Ironically, while PNG has been blessed with an abundance of energy reserves, as a nation we’ve failed to translate those reserves into providing highly competitive (and affordable) energy.”
In line with Mr Scovell, two motorists are asking why an oil producing nation is affected by the global market.
One vehicle owner said: “whatever all the technical reasoning and issues are, I think it is a crying shame that a nation that produces oil is still subject to fluctuations in world prices”.
“When are our resources going to translate into better and affordable life styles for us instead of just an elite few?” another consumer posed.