• PNG Business News

Tension affects oil prices

PAPUA New Guinea is not immune to the world market and will be impacted as a result of tensions between the United States (US) and Iran, which has caused a spike in oil prices, says an executive.

Puma Energy PNG Ltd country general manager and director Hulala Tokome said the company had seen an increase in crude oil prices as a direct result of the rift between the two countries (US and Iran).

Oil prices have jumped by more than US$2 (K6.80) per barrel and the price of Brent crude rose to more than US$63 (K213) as traders reacted following the death of an Iranian general Qassem Soleimani by a US airstrike.

“If the oil price continues to climb as a result of this, surely it will have an impact,”Tokome told The National."

“Crude becomes quite expensive in the market. We are not immune to the effects of world tensions. The price of crude has risen as a result of this."

“PNG has a one month lag in our prices to the market which is an average of the last month’s previous pricing."

“Any effects on the oil price gets put into the market based on an average of last month’s oil price. So yes, we will feel the effects of this. However, pricing is based on the previous month’s average oil price."

“It’s the challenges of business and PNG is not immune to the impacts on the world market and commodity trading.”

When commenting on the company’s own progress last year, Tokome said: “We had a good year in 2019 in continuing to upgrade our terminal and aviation facilities.

“We have been improving our supply chain to our commercial and retail customers, creating close to 500 MSMEs (Micro, Small and Medium Enterprises) through our Puma Gas market setup.”

Source: https://www.thenational.com.pg/tension-affects-oil-prices/

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