Reduce Fuel Prices in Papua New Guinea

Last week, Board Chairman of Air Niugini Sir Frederick Reiher on christening the 4th Fokker 70 aircraft in Alotau, spoke on the Air Niugini’s submission to making air travel affordable for Papua New Guineans by reducing Government Taxes.

While that is a great initiative from Air Niugini to encourage Tourism and lower airfares, the Government would do the people of Papua New Guinea justice by lowering the Fuel prices in Papua New Guinea.

One way to achieve that is to encourage InterOil who has a refinery in Port Moresby to sell cheaply to local suppliers and additional to provide a Tax subsidy for distributors.

Lower fuel prices leads to lower overall transport costs around Papua New Guinea…..as transport costs drives the price up……

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Air Niugini to push for cheap airfares
September 30,2016, 12:00 pm – Post Courier

Air Niugini will put a submission to the National Government to make air travel affordable for Papua New Guineans.

The announcement was made by the airline’s board chairman Sir Frederick Reiher at the naming ceremony of another Fokker 70 aircraft. The plane, the fourth in the series, was christened ‘Alotau’.

He said the national airline was keen to partner with the National Government to achieve two goals: a significant growth in tourism and tourism numbers and to help make it easy for PNG families to travel on domestic air services.

He said it is probably not known that government taxes and charges make up a substantial proportion of the total cost of domestic airline tickets.

He said the level of taxes and charges vary on routes that Air Niugini and its subsidiary airline Link PNG serve. Up to a third of the total cost of an average ticket comprises taxes and charges.

“Air Niugini is also impacted of course by fuel taxes, the cost of which is passed on to our passengers. We have been considering for some time how we might be able to work with National Government to make airfares more affordable firstly for families and local businessmen and women and secondly for our tourists,” he said.

“I appreciate the national budget is also impacted by economic circumstances but I am confident this measure will would provide a real lift to the economy and would deliver higher return to the government over the medium term.”

Planning Minister Charles Abel, who was present for the event, noted the concerns and admitted that tax did constitute up to 50 per cent of the cost of airfares.

He said government revenue was constrained to some degree and there was a reluctance to reduce taxes. But all options will be considered given the broader implications and gains expected.

“Lowering airfares will support tourism and create these huge economic benefits at home so we do acknowledge that and we do commend the PX board and management and staff for the reforms it has undertaken in these difficult times,” he said.

By the same token he also highlighted that while times were tough there had been some positives including a reduction in fuel prices. He challenged the airline to see if this could translate to lower airfares on fuel surcharge.

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