InterOil has nothing to do with fuel rise

National, Normal


INTEROIL Ltd, which has a near-monopoly over Papua New Guinea’s petroleum products, said yesterday that it, has no control or say over retail fuel price tags.
Reacting to widespread outcry from critics and consumers on yesterday’s price rise on petrol, diesel and kerosene, InterOil said  it procures the country’s crude oil from the world market and does not buy direct from the oil fields of Southern Highlands province.
“InterOil does not get its crude oil supply directly from Kutubu, Moran or Gobe,” Susuve Laumaea, the firm’s senior manager media relations and public affairs, said.
Mr Laumaea said that InterOil did not have a contract of supply with Oil Search, the operator of the oil wells.
“Oil Search prefers to sell its crude at premium prices offshore”. 
InterOil’s rebut reports yesterday saying it was a “crying shame” that PNG, an oil producer, remains subjected to fluctuations in world prices.
The Independent Consumer and Competition Commission posted yesterday 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.
The oil refiner said that consumers must know the economics of supply and demand as it buys crude oil on the world market, hence, retail prices were subjected to the procurement expenses.
“InterOil goes out to the international market place and competes at crude oil auction sales with all other refineries for Kutubu, Moran or Gobe crude at the highest premium price on offer,” Mr Laumaea said.
After it buys PNG’s crude oil offshore, it then imports it back to be refined at the Napa Napa refinery near Port Moresby.
“In this process, InterOil has to pay import duty, freight costs, customs clearance, harbour charges, etc,” he explained.
Summed up, the retail price which customers pay entails all these costs and like any other refinery, Mr Laumaea said InterOil “has to make a profit to be a viable business”.
Mr Laumaea said InterOil works in close consultation with ICCC every month to set the monthly domestic fuel prices.
“The bottom-line consideration is that PNG’s domestic fuel prices are determined by forces beyond the control of InterOil and ICCC,” he said
“Even the Government has no control over international market forces.
On that note, InterOil president Bill Jasper said despite the rise, all fuels remained less costly throughout PNG, and compared to prices last Oct, prices now are more than 40% cheaper.  
“All refined fuels are currently very affordable by historic and international standards,” he added.