The Papua New Guinea Government will roll back fuel prices to March levels effective midnight tonight, as part of an urgent response to the global fuel crisis triggered by the ongoing U.S.–Iran conflict.
Minister for Rural and Economic Development and Chairman of the High-Level Cabinet Taskforce on Fuel Shortage, Joseph Lelang, announced the measures during a media conference today, confirming that the State will absorb 100 percent of the recent fuel price increases.
Lelang said the global conflict has severely disrupted fuel supply, with around 40 oil facilities across nine countries in the Arabian Gulf either destroyed or partially damaged, leading to widespread shortages and rising costs worldwide.
“Papua New Guinea, like every country, is experiencing this supply shock. The immediate result is rising inflation and increased prices for goods and services, especially fuel,” he said.
He warned that without swift government intervention, the rising fuel costs would have serious flow-on effects across the economy, impacting transportation, food prices, and everyday goods.
To cushion the impact, the government has released an initial K100 million subsidy through the Treasury to offset the rising fuel costs. Lelang described the move as necessary to protect both the economy and citizens from escalating living expenses.
“As a responsible government, we must protect our people from paying high prices for transport, food, and other essential goods,” he said.
The Independent Consumer and Competition Commission (ICCC) will formally announce the adjusted fuel prices, which will take effect from midnight.
Lelang also issued a strong warning against price gouging, stressing that strict enforcement measures will be implemented to ensure the subsidy benefits are passed down to consumers.
“Those found engaging in price gouging will be dealt with under the law,” he said.
The Minister explained that the announcement was delayed by one day to allow the government to finalize consultations with fuel importers and industry stakeholders, ensuring a clear understanding of how the subsidy program will operate.
He acknowledged the efforts of the ICCC, fuel importers, and industry groups including the Papua New Guinea Chamber of Resources and Energy and the Papua New Guinea Chamber of Commerce and Industry for their collaboration in finalizing the subsidy mechanism.
To ensure transparency and accountability, the subsidy funds will be managed through the Bank of Papua New Guinea, with oversight from a private accounting firm. The firm will work alongside key state agencies, including Treasury, Internal Revenue Commission, Customs and the Prime Minister’s Department, to monitor fund disbursement.
Lelang assured the public that these measures are designed to maintain trust and ensure funds are used appropriately.
Looking ahead, the government will closely monitor global oil prices and currency fluctuations over the next six months, while ensuring a steady fuel supply to support the country’s economic stability.
“We must act decisively to protect our economy and our people from the impact of rising fuel prices,” Lelang said.
