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Papua New Guinea

Self Bunded Tanks in Papua New Guinea. The new frontier for fuel storage.
The November 2018 opening of Mobil’s new 5.6 million litre diesel storage tank at Port Moresby was flagged as a step towards improving national fuel security and meeting growing demand from industry. Dunlop PNG’s James Green says another growing trend for regional operators is on-site fuel storage that puts the power back in the hands of business operators to buy wisely, maximise reliability and reduce transport costs.
Fuel transportation challenges

For James, infrastructure and transport challenges are among the biggest contributors to fuel costs for PNG business.

Old and poorly maintained infrastructure in regional areas means fuel needs to be transported long distances along difficult roads.

“The state of the national highways means moving fuel around is difficult and expensive,” he says.

“Add to that that outside of the main coastal towns, the only access to more remote townships is via ship.

“The main Puma depot is based on Port Moresby, which is road locked, so all fuel everywhere else in PNG is shipped from Port Moresby and road freighted or transhipped to other coastal towns, meaning freight costs are extremely high.

“Some operators also ship directly from overseas to Lae, Kimbe and other townships.”

Quality control – access to clean fuel

Ageing infrastructure and transport issues have a flow-on effect for fuel quality.

“A lot of the diesel or petroleum on the market is water and particle contaminated, either from the storage tanks on the end user site, from tankers or in some cases direct from the source,” James says.

“Fuel prices are also linked to the Singapore price rather than the cost of production in PNG, which means the cost of the final product can be out of step with the local cost of living and doing business.





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Ageing infrastructure and transport issues have a flow-on effect for fuel quality.

“A lot of the diesel or petroleum on the market is water and particle contaminated, either from the storage tanks on the end user site, from tankers or in some cases direct from the source,” James says.

“Fuel prices are also linked to the Singapore price rather than the cost of production in PNG, which means the cost of the final product can be out of step with the local cost of living and doing business.

For many businesses, reducing fuel costs and downtime has meant finding new fuel storage options like on-site self-bunded fuel storage tanks.

“Taking control of costs and quality is one reason many companies outside of the main towns have started looking to hold additional fuel on site, so there has been a marked increase in sale of storage tanks,” James says.

“In the past a lot of the tanks were owned by the major fuel retailers in return for locked in contracts of supply, but there has been a shift away from that system as customers are looking for the flexibility to change suppliers based on changing pricing and rebates.”

For many businesses, reducing fuel costs and downtime has meant finding new fuel storage options like on-site self-bunded fuel storage tanks. “Taking control of costs and quality is one reason many companies outside of the main towns have started looking to hold additional fuel on site, so there has been a marked increase in sale of storage tanks,” James says. “In the past a lot of the tanks were owned by the major fuel retailers in return for locked in contracts of supply, but there has been a shift away from that system as customers are looking for the flexibility to change suppliers based on changing pricing and rebates.”