Ross Sheil and Yahneake Sterling, Staff Reporters
GAS PRICES were raised almost $2 per litre yesterday.
Petrojam, the refining arm of the Petroleum Corporation of Jamaica (PCJ) which supplies retailers, said the rise was in response to oil hitting a record US$72 per barrel in New York this week.
This price hike has been attributed to the dispute between Iran and the international community over Iran's nuclear programme, which threatens to cut off oil supply from that key Middle East producer.
"The price of crude has increased significantly over the last few days and we are (still) expected to face increased prices and we just have to follow the market," Petrojam group managing director, Ruth Potopsingh, told The Gleaner.
Minister of Industry, Commerce, Science and Technology, Phillip Paulwell, acknowledged the impact the rise would have on the economy, but said the full effect was offset by the PetroCaribe Agreement with Venezuela. Under PetroCaribe, Jamaica and other Caribbean countries officially pay the full price of the oil, but the governments get a very low interest loan covering a part of that price, repayable over 15 years.
"Without PetroCaribe we would be devastated from having to pay that 40 per cent extra. Having to find that amount of foreign exchange to pay for it would cause us tremendous strain," said Mr. Paulwell.
Opposition Spokesman on Finance, Audley Shaw, acknowledged that Jamaica was among the 'victims' in the world oil market, having had no relation to the politics that was causing the instability. But Mr. Shaw said the country needed to reduce its reliance on oil for electricity generation.
INTELLIGENT ENERGY POLICY
"Given the fragility of the world oil markets it brings into sharp focus the need for us to have an intelligent energy policy ... we have allowed JPS the expensive generation of electricity using the most 'cost-ineffective' source of generation," he said.
Trevor Heaven, president of the Jamaica Gasolene Retailers Association (JGRA), said retailers would have to borrow more money from banks since they have to pay for fuel upfront or on delivery.
"Every time there is an increase in the cost of fuel it has to be underwritten by retailers and what you find is that we have to find more money to buy fuel," he said.
When contacted, Esso Country Manager Phillip Calder declined to comment on the rise.
Last August when oil prices soared to a then high of US$67 per barrel, unleaded 87 gasolene was sold by Petrojam for $43.98 per litre and 90 octane for $45.42 per litre.
| Product | New price per litre | Rise per litre |
| Unleaded gasolene 87 | $50.63 | $1.95 |
| Unleaded gasolene 90 | $52.07 | $1.95 |
| Diesel | $45.82 | $1.90 |
| Kerosene | $45.85 | $1.60 |
| Propane | $25.19 | $0.85 |
| Butane | $27.19 | $0.85 |
