JIS News

Commerce, Science and Technology Minister, Phillip Paulwell has maintained that the Gulf Reference Price being used to purchase oil was the best system for Jamaica.He noted that while there were different reference prices worldwide, these were normally based on where one sourced the oil, and Jamaica purchased oil in the region because this was the cheapest source.
“If we were to go outside the region, the transportation cost alone would make it quite unreasonable and much higher than the prices that we purchase for within the region,” the Minister told JIS News in an interview yesterday (October 9).
In the region, the reference price for the purchase of oil is the West Texas Intermediate. Jamaica purchases crude on this basis and has been doing so over successive governments. To ensure transparency and fairness, the same benchmark is used in the sale of the finished product.
“You can’t just whimsically get up and change your references overnight”, the Minister pointed out, adding that, “once you are using a particular reference to purchase . then it is the same reference you use to sell.”
The pricing mechanism, he noted, has worked well for the country over the years, “because Jamaican now has a competitive marketplace, so that anybody can import and indeed compete directly with Petrojam in the selling of finished products”.
“In fact, those persons who had the option to go elsewhere prefer to purchase through Petrojam, because we deal reasonably with our clients. we price reasonably in a transparent way and we don’t manipulate prices,” the Minister emphasized.
Meanwhile, the Minister has blamed the continued instability in the Middle East, increased demand in the United States, China and India, in addition to speculation, for the doubling of world crude prices since the start of the year.
Gas prices have doubled since January, prompting the government to intervene in the sector over the last two weeks to absorb the 50 per cent rise in the price of petrol and the more than $11 per litre increase in the price of kerosene.
Minister Paulwell told JIS News that while “we thought it was wise for us as a government to absorb this.we cannot continue to absorb these increases or else we would, in fact, be manipulating our own transparent system. So we intend, as of this coming week, to get back to the full passing through of increases”.
He said the government continued to urge consumers to be more efficient in energy use, “because we don’t produce it, we don’t make it, it is not ours to waste”.