PCJ Explains Pricing Mechanism

To simplify the information on the pricing mechanism of Petrojam, the Petroleum Corporation of Jamaica (PCJ) held a forum on January 22, in Kingston, where its Chairman and senior management team explained the issue, and answered related questions.

Chairman of the PCJ, Christopher Cargill, led the discussion by giving a perspective on how petroleum refineries operate, and how they make profits.

He said they are not always profitable, and the fall in oil prices have resulted in losses for Petrojam.

Mr. Cargill informed that while the company buys petroleum products at the prevailing prices, when there is a sudden fall on the world market, the products have to be sold at prices that the market determines.

He also noted that other companies are competing with Petrojam in the importation of petroleum products, so prices are arrived at by what the market decides.

Other presentations came from Group General Manager at PCJ, Winston Watson, and Acting General Manager at Petrojam, Michael Hewett.

Mr. Hewett told the audience that Petrojam’s pricing mechanism is based on internationally recognised practices, while Mr. Watson sought to assure the public that the pricing formula at the company is fair and competitive.

Meanwhile, Minister of Sate in the Ministry of Science, Technology, Energy and Mining, Hon. Julian Robinson, said it is crucial that various interest groups dialogue on Petrojam’s pricing formula, because it is not widely understood.

“With the limited understanding of the mechanism, what we hope to achieve is to have a dialogue, and to close that gap, and bring the public up-to-date on how the agency works,” he noted, emphasising that the public must be aware of actions that affect them.

The State Minister said that while most persons have been anticipating lower fuel prices, due to rapid fall on the global oil market, a gap also exist where the public need to understand “how Petrojam decides on the pricing of its various products, and the impact.”

The forum was attended by representatives of  business organisations and consumer groups, and members of the general public.