Trump’s statement ‘reassuring’

THE statement by US President Donald Trump to make available more oil from its strategic reserve, and also the assurance from Saudi Arabia to restore production promptly, is reassuring to the global economy including Papua New Guinea.
Independent Consumer and Competition Commission (ICCC) commissioner and chief executive officer Paulus Ain said the reassurance was necessary to avoid a price shock for crude oil and its negative consequences such as inflation.
Ain made the comments as global news agencies ran information and analysis following the recent Saudi Arabian crude processing facility attack.
“Due to the assurance from the US and Saudi Arabia, prices began falling as Saudi Arabia began restoring its production level that was affected by a recent drone attack,” he told The National.
“PNG is not a major producer of crude oil therefore we do not have any influence over the world market price for crude.
“ICCC also has no control over the price of crude oil which influences fuel prices in the country.
“The US is now the biggest producer of crude oil, followed by Saudi Arabia.”
Ain said according to the Napa Napa project agreement between the State and Puma Energy, the price of fuel is mainly driven by the world market price for crude oil, freight and the kina to US dollar exchange rate.
“So whenever there is an increase in the price of crude oil, prices for diesel, kerosene and petrol will also increase,” he said.
“Whenever the international prices for crude oil decline, fuel prices also decline.
“That is why the monthly fuel prices fluctuate throughout the year, as per the monthly fuel price announcements by ICCC.” He said Saudi Arabia is the second biggest producer of crude oil hence, the world market price for crude oil is influenced by production levels there and other major crude oil producing countries.
“The attack on Saudi Arabian crude oil production facilities was aimed at disrupting production in Saudi Arabia therefore there was a resultant surge in the price for crude oil,” he said.