Susan Smith, Staff ReporterFILLING YOUR gas tank just got a lot more expensive. When Petro-jam announced an eight per cent hike on the price of 87 unleaded gasolene last Wednes-day, most motorists probably filed the information away as just another unpleasant fact of life they would try to put off facing for as long as they could.
Many would be surprised to know that they are now paying almost five times as much to fill up their gas tanks as they would have a decade ago. It is likely that the consumer's ability to purchase the commodity has, in all probability, been severely cut compared to just a year ago, owing to the impact of inflation.
Petrojam announced price increases on petroleum products last Wednesday requiring market-ing companies to purchase 87 octane gasolene for $43.98 per litre and 90 octane unleaded for $45.42 per litre.
GAS PRICES
Sunday Business took prices from various service stations across the Kingston Metropolitan Area and Montego Bay and discovered that motorists are now paying an average of about $49.00 per litre for the 87 unleaded, $52.89 for the 90 unleaded and $48.53 for diesel at the pumps when the marketing companies and retailers add their margins. The trend showed that roughly $6.50 was added to the original prices from Petrojam.
A vehicle with the fuel capacity of about 48 litres of petroleum, according to the president of the Used Car Association of Jamaica, Mr. Kenneth Shaw, means the motorist will now spend a minimum of $2,352 to fill up his or her vehicles with the cheapest gas.
For many motorists, this is a much deeper dip into the pocket compared to a year ago when they were spending in the region of $1,700.00 to fill up. A year ago in mid-August, Petrojam posted prices to marketing companies at $31.15 per litre for the 87 unleaded, $32.59 for the 90 unleaded and $28.78 per litre for diesel.
To extend the comparison, in 1995, motorists were spending approximately $600 to fill up their tanks when 87 unleaded petroleum sold for $11.84 per litre or $53.84 per gallon.
Views differ on the effect this is having on inflation as well as the consumer's pocketbook.
Accountant Dennis Chung believes that the impact will not be dramatic while economist Errol Gregory is fearing that when this hike in prices is added to the bus and taxi fares and electricity rates Jamaica will face a serious erosion in its living standards.
"It won't have the type of impact as the GCT or the hurricane which reduced the agricultural products," said Mr. Chung. "I think if you look at how gas prices have moved over the last year and a half, it has really not impacted much on inflation," he added. He further pointed out that gas prices over the last year have increased more than any other time in the history and people have not reacted very strongly to them.
GREATER IMPACT
Although consumers are paying substantially more for gasolene today than they did 10 years ago, Mr. Chung believes they were in a worse position to absorb the cost before. "In the '90s so many things were happening and inflation was up so the impact was greater." he said.
In fact, Mr Chung recalled that last year when the world price and was approximately US$30 per barrel, the impact on consumers seemed greater at that time than today.
Mr. Gregory thought otherwise. "We are back to double digits inflation. The Memorandum of Understanding has kept salaries in the single digits so consumers are back to the ropes."
The recent hike in petroleum prices will present a good excuse for the rise of inflation, says Mr. Chung. "Now that inflation is high, they are blaming it on the gas bill."
One way to ease the pain at the pumps, the manager at a Petcom service station told Sunday Business, was that motorists could buy less gas and better organise their itinerary.
