KEY POINTS
- The Government moved about K300 million from fuel relief to drought relief.
- Diesel is up a third since March, to K5.90 a litre.
- Police have warned that PMV drivers who strike will be arrested.
- The ICCC can raise the K1.60 bus fare before January but has not acted.
K300 million moves to drought relief
Treasury told the ICCC that the Government’s K1 billion fuel subsidy “has been fully utilised”, the commission said on 7 October.
By cutting back the subsidy, the Government saves about K300 million, according to the ICCC. That money is going into this year’s supplementary budget to pay for most of a K500 million El Niño drought relief programme.
Fuel will stay free of GST until at least 31 December. The rest of the subsidy will be phased out over the next two months, the ICCC said.
Daggy told The National on 13 October that the Government could not keep paying the full difference forever. Health, education and the drought also need money, he said.
Prime Minister James Marape started the subsidy in April. He set aside K1 billion and told the ICCC to keep pump prices at March levels, NBC News reported. “We do not pass on the burden to the consumers,” he said.
PNG Today reported in May that the subsidy was holding diesel at K4.44 a litre, when the real price was K8.35.
From July, the help was narrowed to service station customers, drum sales, PNG Power and aviation, the ICCC said.
After returning from the United Nations in New York, Marape said fuel would stay expensive into next year, The National reported. He said the Government would look at whether the subsidy could continue. Nothing has been decided.
Diesel up a third since March
On 8 October, petrol, diesel and kerosene in Port Moresby all went up K1, from K4.90 to K5.90 a litre, the ICCC announced.
Diesel was K4.44 in March. It now costs K1.46 more, a rise of almost a third in seven months.
Without any help, diesel would cost K7.31 a litre this month, according to the ICCC’s price table. The GST break saves about 66 toea a litre and what is left of the subsidy saves about 75 toea.
Elsewhere in the same statement, and in Daggy’s comments to The National, the ICCC gives the full price as “around K7.36”. We use K7.31, the figure in its table.
Buses still fill up at the subsidised price. A 30 September ICCC notice stopped commercial customers, such as resource companies, from filling tankers and drums at service stations, but left ordinary vehicles free to fill up there.
Drivers face arrest
On 13 October, NCD and Central police commander Benjamin Turi told officers that PMV drivers who strike and make the public suffer will be arrested and charged, EMTV reported. He said bus operators have rules and laws to follow.
“Police will not tolerate any action that disrupts public services and inconveniences the public,” Turi said.
EMTV’s report does not say which law striking drivers would be charged under.
In April, before the subsidy kicked in, Route 9 drivers parked their buses at Kone Tigers Oval in Waigani, leaving commuters stuck between Gerehu and Boroko, The National reported. The buses were back on the road later that day.
In an earlier strike over an alleged police assault on a bus crew member, the then Transport Minister, Wesley Nukundj, threatened to cancel drivers’ licences, ABC Pacific reported.
K1.60 falls short of costs, by the ICCC’s own numbers
In its 2025 review of bus and taxi fares, the ICCC found fuel makes up about two-thirds of a PMV’s running costs.
On our calculation, when diesel goes up by a third, running costs go up by about a fifth. That would push a K1.60 fare to about K1.95, assuming every other cost stays the same.
The same review found bus running costs had risen about 60% since 2019, well ahead of fares. To protect households, the ICCC chose to raise fares slowly: 20% this year, 20% next year and 20% in 2028.
Port Moresby bus owners were the worst off of the six towns the review surveyed. Measured on the fares they actually charge, they were bringing in less than half of what it cost to run their buses.
The legal fare in Port Moresby went from K1.40 to K1.60 in January, the ICCC said. Many buses charged K1 before that, which the ICCC says was allowed because it was below the maximum and made giving change easier.
Bus owners told the review that loans cover about 62% of what they pay for their vehicles, at interest rates from about 5% to as high as 50%.
Port Moresby has 32 licensed bus routes, the review found, but no limit on how many buses can run each route. Some routes are packed with buses and others have too few. The only public bus service, NCDC’s Eda City buses, runs five buses on three routes.
Commuters pay
The ICCC’s review found most Port Moresby buses charge K2 on full routes, well before October’s price rise.
Charging above the legal fare is against the Prices Regulation Act, the ICCC says. Since last year, the fine can be up to K10,000, or K30,000 in more serious prosecutions. It used to be K600, ICCC manager Jacqueline Wafi told NBC News in January.
A worker on the old minimum wage spent about 14% of their pay on transport, or 21% if they lived on the edge of town, the review found. The World Bank says anything over 10% is too much.
At K2 a ride, someone who takes two buses to work and two buses home pays K8 a day. On the new minimum wage of K5 an hour, that is more than an hour and a half of work every day just to get to and from the job.
The ICCC warned on 12 October that higher fuel prices will push up the cost of food, power and transport. It told people to “practice thrifty habit” and stick to a budget.
The ICCC’s fare trigger sits unused
The ICCC’s fare review gives it a way to raise fares before January.
Normally, fares change once a year, based on diesel prices and the cost of living. The review also says that if fuel prices move sharply, using 10% as an example, the ICCC can add a small extra charge to the fare. It says a big global jump in fuel prices could justify raising fares sooner.
Diesel has gone up 33% since March, more than three times that example. No new fare has been set.
On 12 October the ICCC said any fare rise must be approved by the commission. It said the yearly fare review is “only 2 months away” and that it is still deciding what to do.
Daggy told The National the next day that the ICCC is looking at costs to decide whether a fare increase is needed now, and will find a “practical solution” quickly. He asked bus owners to be patient and said it was unfair to pass higher fuel costs straight on to passengers.
Nobody is enforcing the fare
The ICCC sets bus fares but does not check whether buses stick to them, according to its own review. That job belongs mainly to the Road Traffic Authority, with help from traffic police.
The RTA told the ICCC that its rules have no penalty for overcharging. The RTA, the Department of Transport and the police did not take part in the ICCC’s fare review.
The review recommended that the ICCC, the RTA and the police sign an agreement on who enforces what.
Fares due to rise again in January
The rest of the fuel subsidy ends over the next two months, the ICCC says. The GST break, worth about 66 toea a litre on diesel, lasts until at least 31 December. The Government will decide in the 2027 Budget whether to keep it.
In January, bus fares are due to go up again: another 20%, plus an adjustment for fuel and living costs, under the ICCC’s fare plan.
Until then, the legal fare on a Port Moresby bus stays at K1.60, while diesel costs a third more than in March. The K300 million that could have kept fuel cheaper is going to drought relief instead.
