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.

Over the last few weeks gas prices, gas prices have been trending down. Since the Government’s increase of the GAS TAX, the price annouced by  PetroJam has tend to trend in the upward direction. To be honest some of this movement was directly related to increase in price of OIL on the world market that now hovers in the  high $60s to low $70s per barrel.

Price difference remain high

One trend that has not changed is the difference in prices  depending on which station you visit. You can see a quick comparison by click here. For e.g. the price differential for E10 was almost $6 per litre.  The price difference for other products is even higher.

New Price Leader

Over the last week, the arrival of Micheal Service Station at Heroes Circle has introduced a new price leader. Micheal’s took over from the Texaco operation. For years we wonder why that station hardly showed prices, they were expensive, and why they did not organise and compete against Total. While the competition is finally here. The lines are organised now with entrance and exit marked off with chains in place to control the traffic.  The result is from a situation of empty pumps and poor service, to long lines and much bettter service. The hope is that they will keep it up.

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

It is now official, the Special Consumption Tax(SCT) on Gas products is to be increased by $8.75 per litre. The  Finance and Public Service Minister of Jamaica, Audley Shaw, announced the increase in parliament today.

Many gas stations, in Kingston were swamped with motorist trying to get the ‘last’ of the cheap gas. There was no such rush according to radio reports in the rest of the country.

The data below shows how the situation changes when this tax comes into place on April 2009, using the ex-refinery price of Unleaded 87 for April 23, 2009. 

Current Situation

Ex-Refinery Before Tax: $44.17

Current Tax: $7.36
Ex-Refinery After Tax: $51.53

With Tax increase:

Ex-Refinery Before Tax: $44.17
New Tax: $16.11 (7.36 + 8.75)
Ex-Refinery After Tax: $60.28

As usual gas stations will their respective margins.  

Now that the gas tax increases have been announced, it is hoped that Jamaicans will either accept the decision or if so moved, lodge their protest in a peaceful manner. One simply protest is to boycott the product as far as possible or simply conserve. Time will tell whether or not Jamaica will face similar Gas Riot to those of 1985 and 1999.