The Sandaun Provincial Government in Papua New Guinea has begun investigating claims that fuel is being smuggled into Vanimo from Indonesia and sold on the black market.
The newspaper, The National, reports that the provincial administrator Joe Sungi has issued a warning that operators of such illegal activities face heavy fines.
The probe comes after reports that high fuel prices in Vanimo had forced consumers to visit the black markets where cheaper fuel from across the border was sold.
The price in Indonesia is less than half.
Residents in Vanimo are allowed to buy up to 20 litres of fuel in Jayapura for personal consumption but none of it may be onsold.
The Indonesian government prohibits the sale of petroleum products outside its borders.
