By Tyrone Reid, Staff ReporterJAMAICANS ARE once again staring down the barrel of another increase in gas prices, as world oil prices struck a new record high yesterday.
The price of U.S. light crude oil reached a record high US$41.85 per barrel. The current price is the highest ever since the New York Mercantile Exchange launched the crude contract in 1983.
The nation, not yet acclimatised to the $1.55 per litre increase that was implemented at the pumps last Thursday, will, experts say, have to brace itself for another increase in the coming days.
According to Zia Mian, an international consultant on information technology and energy, per litre prices at the pumps are the tip of the iceberg. "The problem for Jamaica is not at the pump level but how much foreign exchange is needed in order to finance the import bill," he said
COULD AFFECT ELECTRICITY BILLS
Mr. Mian further argued that if the prices remain at the current level, it could easily propel the oil import bill to the billion-dollar mark. He also warned that higher electricity bills are also on the cards. "It is going to cost you in terms of higher electricity cost... remember that when you get your electricity bill at the end of the month the fuel cost is a direct pass through on your bill so they don't have to go to the Office of Utilities Regulations to adjust their prices... so you'll see a definite increase in electricity costs," he said.
Yesterday, at the Planning Institute of Jamaica's (PIOJ) Quar-terly Press Briefing, Dr. Wesley Hughes, director-general of the PIOJ, said that the nation will face the repercussions in the coming months.
"In the next few months the rise in oil prices will create a more uncertain situation in the U.S. and, therefore, the impact on Jamaica will be negative," he said, addressing the gathering at the PIOJ's Quarterly Press Briefing.
Lloyd Brown, president of Jamaica Gasolene Retailers Association, concurred. "Even if OPEC decides to increase production, prices would not change tomorrow (because) there is a lag so it would take a while and I am afraid that Jamaica will have to be prepared to experience still a little higher prices for the time being," he said.
While he was unaware of the price hike yesterday, Mr. Brown said it was not surprising. "It is expected that it will go up unless OPEC decides otherwise. I heard there was supposed to be a meeting of OPEC members and they would have to decide whether they are going to increase production and if they increase production then that would necessitate a reduction of the price," said Mr. Brown.
Mr. Brown added that petroleum prices' sharp jump from about $22 at the start of the year to around $34 was eating away at the profits of the retailers. "We (retailers) used to enjoy a 7 1/2 to eight per cent margin, we are below the five per cent margin as we speak..." he said.
Mr. Mian highlighted that regardless of the price increases, local petroleum consumption has increased. This, he says, will have to change if the nation is to weather this period effectively. Also he recommended that the Government look at bringing efficiency to the energy sector.
