Fuel prices stabilising despite external shocks

Treasurer Ian Ling-Stuckey says fuel prices in the country are stabilising despite global uncertainties and effects on Papua New Guinea.
He said the war in Ukraine had impacted the price of oil and energy and causing international uncertainty and high prices, however, the price of oil had been decreasing of late which was a good sign.
“One of the greatest uncertainties is what is happening to fuel costs,” the Kavieng MP said.
“PNG follows best international practice in basing its national pricing using the West Texas Intermediatory (WTI) price for oil as it most closely tracks the costs of importing fuel from Singapore.”
The 62-year-old added that from over US$60 (about K206) per barrel in December 2019, fuel prices collapsed to under US$20 (about K68) per barrel in April 2020, but then rapidly increased to US$120 (about K413) per barrel in March this year.
“In response to this extraordinary increase in cost of living pressures, the Government responded in April by removing all excise taxes and the 10 per cent GST (goods and services tax) on fuel.
“Of course this won’t get back to the under US$60 per barrel enjoyed by PNG households from 2015 to 2020. But this action was an important step in lowering costs.
“The good news is that international oil prices are now falling. The latest price is down from US$120 (about K413) on June 13 to US$89 (about K306) last week.
“This is driven by key Opec (Organisation of Petroleum Exporting Countries) members committing to increase production.”
He said based on the international pricing formula used by the ICCC, this was expected to lead to significant falls (up to 20 per cent) in petrol and diesel costs over the next two months.
“The Marape Team will continue to monitor these price trends. Even with the fall in international oil prices, the Marape Team is looking to extend the excise and GST exemptions for a longer time meaning the full impact of this fall in international prices can benefit our households.”