Jamaica Gas Prices

Now that the toll increases in Jamaica are into its third day, we turn attention to what it means to motorist already struggling with high gas prices. Interesting the Public Defender speaking on Power 106 FM has joined the debate and has called for a rollback for at least 7 days because lack of notice.

Based on the calculations, the minimum increase was 14.29% while the maximum was 22.22%. Interestingly both occured on the Spanish Town to Kingston Leg in the Class one and Class two categories respectively.

However, the Portmore to Kingston Leg recorded the highest average increase of 20.95%  across all class categories, while the overall average increase in toll rates on all legs to the motorist was 19.27%.

The % increases for each class on the toll roads are shown below.

Vineyards Plaza (Kingston/Spanish Town to Sandy Bay)

Class one: was $230 now $270 increase 17.39%

Class two: was $310 now $370 increase 19.35%

Class three: was $580 now $700 increase 20.69%

Spanish Town (Spanish Town to Kingston)

Class one: was $70 now $80 increase 14.29%

Class two: was $90 now $110 increase 22.22%

Class three: was $180 now $210 increase 16.67%

Portmore ( Portmore to Kingston the shortest leg but has a six lane bridge)

Class one: was $100 now $120 increase 20.00%

Class two: was $140 now $170 increase 21.43%

Class three: was $280 now $340 increase 21.43%

Tied to exchange Rate

The toll agreements basically links the increases directly to the value of the Jamaican dollar to U.S. dollar rate. The Jamaica dollar has devalued in relation to the U.S. dollar from $72.17:$1 in July 2008 to  $89.05:$1 in July 2009, roughly 23.38%. It should be noted that toll increases are due on July of each year.

Based on observation the Portmore leg, is by far the shortest but carries highest volume of traffic. Therefore although the projected revenue increase will likely exceed 19.27%.

The gas prices has since late April 2009 have been influenced increased government taxes on the product and now toll road users have to adjust to new toll rates.  In the next post we will look at the increases in dollar amounts on motorist’s budget.

Source:

• BOJ average FE rate

After a few weeks notice of the impending toll rate increases, Jamaicans on the told roads woke up to the reality of the increases. The increases are significant especially given the current recessions and testing times facing the island of Jamaica.

The increase shown significant with the lowest increase of  $10 being around a 15% increase.

Vineyards Plaza (Kingston/Spanish Town to Sandy Bay)

Class one: $230 to $270

Class two: $310 to $370

Class three: $580 to $700

Spanish Town (Spanish Town to Kingston)

Class one: $70 to $80

Class two: $90 to $110

Class three: $180 to $210

Portmore ( Portmore to Kingston the shortest leg but has a six lane bridge)

Class one: $100 to $120

Class two: $140 to $170

Class three: $280 to $340

Class one are regular motorcars, Class two include SUVs, small buses and Class three include large buses, trucks, trailers

Just a note. The Toll Authority website still shows the old toll rates. The toll rates have not been updated on the website.

Today is the day when the the gas tax announced by Jamaica’s Minister of Finance takes effect. According to a  Jamaica Gleaner report,  there was a rush on Gas Stations yesterday, however, I did not see any at the stations I passed.  Indeed, I  happened to be at a Gas Station twice in the evening an although there was an increase in activity there were no delays or no real rush.

The jamaican government seems to believe, based on pass experience, that the demand for Gasoline will not change with the price increase, i.e. demand will be inelastic, to borrow a term from economic theory. The months ahead will prove whether their assessment was right or wrong.

In the meanwhile, remember to practice these gas saving tips.

Related:

• Gas Tax takes effect today

Well it is budget time in Jamaica, and with falling revenues from Bauxite, Tourism and other areas, the government is looking for new areas to raise revenue. Since late 2008, Mike Henry, Minister of Transport and Works, has been floating the idea of an increasing the tax on gas. The last time  an increase in the tax on gas was attempted, the Government of the time faced the Gas Riots of 1999 and had to roll back the tax.  Since then any suggestion of an increase in the gas tax has quietly died.

The problem is this time, the government might argue that it has no where else to turn. Our dependency on foreign oil is a huge drain on the economy and the demand for US$ continues to put pressure on the Jamaican dollar.  Jamaica continues to have one of cheapest gas prices for a country that that does not have oil. Taxing gasoline also the government to widen the tax net, something that governments have been trying to do over the years.

For now we sit and wait and wonder, gas tax increase and how much?

A new but not so new trend seem to be developing in the Cross Road area, the concept of day versus night time prices.

Total (Worldtron) and the neighbouring Texaco( beside Burger King) seems to have implemented this practice. The day time prices are a litte lower than the night time prices. CVM TV had carried this report some time ago. From a business point of view this can be viewed as fair but consumers need to be aware that such a policy is in place.

Should these stations be made to alert customers to peak and off peaking pricing? I think so. imagine a customer seeing a price in the evening and deciding to stop by later and purchase. Unconsicuously the previus price would now be onthe persons mind when the make a stop in the night to fill.

It also means that consumers have got to be more aware of what’s happening around them, but the stations need to advise the customers that this is the policy.

What do you think? Do you know of any other stations practicing this.