Prime Minister James Marape has announced a K1 billion government intervention to cushion the impact of rising global fuel prices, as tensions in the Middle East threaten supply and drive-up costs worldwide.

Speaking at a press conference on Wednesday, Marape confirmed that a high-level Cabinet committee, chaired by Minister Joseph Lelang, has been established to address the looming fuel crisis. The committee will work closely with the Treasurer and key economic agencies to manage the situation.

The Prime Minister said Cabinet acted following advice from the Independent Consumer and Competition Commission (ICCC), which indicated global fuel prices have surged significantly, with import costs rising by as much as 70 to 80 percent.

“To protect our people and economy, government has allocated a billion kina to support fuel importers so that the increased cost is not passed on to consumers,” Marape said.

He explained that the subsidy will ensure Papua New Guineans continue to pay fuel prices at March 2026 levels, despite global increases. The ICCC has been directed to review current pricing and adjust it back to March rates for petrol, diesel, kerosene and jet fuel.

Marape described the move as a necessary intervention during extraordinary times, stressing that Cabinet was unanimous in its decision.

“This is a big call, but in tough times, government must step in,” he said.

Funding for the subsidy will be sourced through a combination of tax relief measures, including GST, import duties and potential tax credit arrangements with fuel importers.

The Prime Minister also confirmed that the government is working with international partners, including the United States and Australia, to secure fuel supply, while monitoring developments in key global shipping routes such as the Strait of Hormuz.

He said Papua New Guinea currently has sufficient fuel supply until May, but efforts are underway to ensure continued access beyond that period.

Marape urged citizens to use fuel wisely and avoid unnecessary consumption, while encouraging greater reliance on locally produced food to reduce the impact of global inflation.

“We are also prepared to subsidize the transportation of local produce to major urban centres like Port Moresby to ensure food security,” he said.

The Prime Minister added that an initial K100 million will be made available immediately to assist importers with the full K1 billion facilities to be rolled out as needed.

He assured the country that government agencies, including Treasury, the Central Bank and the ICCC, are working together to deploy both fiscal and monetary measures to stabilize the economy.

Marape said the revised fuel pricing is expected to be announced within the next week as authorities finalize the adjustments.

“We are doing everything possible to shield our people from the full impact of this global crisis,” he said.