Jamaica Gas Prices

So often when we talk about Jamaica we tend to focus on the major cities and towns e.g. Kingston and just maybe Montego Bay and Ocho Rios. Today we shift a little to focus on Montego Bay.

Motorists in Montego Bay and most parish capitals and major towns e.g. Santa Cruz, St. Elizabeth, St. Ann’s Bay, Brown’s Town and Ocho Rios, St. Ann among others,  have had to endure horrendous traffic conditions.  Some of the problem can be blamed on the behaviour of the motorists while most of it really has to do it inadequate infrastructure, the result of poor planning.

Traffic is enemy of the motorist as it results in greater gas consumption, that is reduce mileage, general wear and tear on the vehicles engine.  It is in this vein that I am happy to see that something is being done again to try and fix the traffic situation in Montego Bay.  The opening of the Howard Cooke Highway went a long way many years back ( I can remember) to solving  the problem by allowing traffic to bypass the city center. Now the city center for years has continued to suffer.

Recently Radio Jamaica carried report about help for Montego Bay’s Traffic Problem. The plan, a traffic management system, calls for new traffic lights and surveillance systems.  It is interesting that the article made note of the consultations held among the motoring public, pedestrians and the authorities. It is hoped that the team work will make a difference.

No ‘organised’ Public Transport.

On the other hand St. James does not have an ‘organised’ public transport system. Transportation is basically limited to route taxis and the competing illegal taxis referred to as ‘robots’.  I was surprised that there was no mention of this in the plan.  As long as there is no proper public transport system the demand for vehicles will grow and problem will not go away. Some plan to stamp out the indiscipline needs to be in place.

Personally, the city and parish needs an overall as some of the streets are just too small and there is revisit the traffic flow. There is also a need for improved road signs such as one-way signs, street names and the vandalism of these signs needs to stop.  Finally there needs to proper planning for development of the city and proper transport centers will be critical.

Half-way-tree transport center example

The order that the Half-way-tree transport center has brought to Half-way-tree is amazing and projects of this kind relevant to  needs of other town centers need to be explored. It is interesting that it is the “robot” taxis that threaten to disturb the order of Half-way-tree.

The reality though is nothing burns gasoline like sitting idle or in being slow moving traffic and any solution will be of benefit to struggling motorist. What do you think is solution to Montego Bay’s traffic problem?

Source:

• New traffic management system for Montego Bay

This has been an interesting week for motorists in Jamaica, but then again being a motorist in Jamaica is always interested.  On September 9, 2009, the Government of Jamaica announced a  6 month stimulus package for the auto industries in Jamaica. 

On the back on a 60% fall in sales, new and used car dealers apparently lobbied the government for some relief and alas got it. The government is strapped for cash so anything is better than zero and with fall-off in sales it meant less revenue for the government pockets.

The details 

For motor vehicles 1000-1600 cc, the SCT of 10% becomes 0%. The results it that the overall markup do to SCT and GCT will decline about 25% from 82% to 63%. 

Vehicles under 1000 cc already of 0% SCT while high-end vehicles will see SCT reduced from 70% to 35%. In between SCT for 1600 to 2000 cc moves from 20% to 5%, and for 2000cc to 3000cc vehicles the change is from 35% to 15% resulting in aggregate reduction in taxes from 110%  to 77% and 128% to 96%

As usual there are some interesting footnotes.  Those eligible for the 20% duty concession  can now import vehicles with any allowed cc rating as the previous restriction to this category has been removed. However the ceiling on the value of the vehicle of US$25,000 remains.

My thoughts are,  this should not be bad move but there are concerns. Will person exploit this to bring more gas guzzlers into the island? What about our Oil bill and our foreign exchange problem or do we have one?  

The Portmore and other Toll users are looking for a Stimulus Plan.

n.b. Gas Prices from the refinery went down this week.

Sources

• 6 months stimulus package for new & used car sector
• Government slashes car duties

We have looked at the increases and we recognise that the Portmore leg had the highest average increase of  20.75%. Before we look at the actual cost and the impact on budgets let us make some assumptions. We will first assume that the Portmore driver goes to work and back home each day for 5 days a week. We will do our calculation using  4 weeks in a month and we are not removing the holidays.

Class One Vehicle

For a Class One driver the toll moves from $100 to $120.  For an average month the cost moves from somewhere over $4,000 ($100×5x2×4) to over $4,800 ($120×5x2×4).

For a year, 52 weeks, this figure moves from $52,000 (100×5x2×52) to $62,400 (120×5x2×52)

Class Two Vehicle

For a Class Two driver, Larger SUVs the toll moves from $140 to $170. For an average month the cost moves from somewhere over $5,600 ($140×5x2×4) to over $6,800 ($170×5x2×4).

For a year, 52 weeks, this figure moves from $72,800 ($140140×5x2×52) to $88,400 ($170×5x2×52)

Options

The question now is what will the Kingston based worker that drives and uses the toll road alter their budget? Do doubt this increase will have an impact on workers subject to wage freeze and increase prices all around. Ensuring that the best petrol(gas) is being purchased for the lowest price and keeping the vehicle tuned will be critical in maximising savings.

One is way is opting to car-pool, take the bus or look at the tele-commuting option given our increasing Internet and computer penetration. Somewhere in the mix we possible might here the phrase flexi-week.

Do you have any ideas?

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.