Jamaica Gas Prices

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.

A few days after PetroJam posted its response,  Gerald Cameron once again states the case ask revisit their information.

I am here to dispute that with facts. The reduction in our ex-refinery gasoline prices declined by an average of 37 per cent for unleaded 87 (from J$78.43 on July 17, 2008 to J$48.78 on January 7, 2009 (refer to Petrojam’s website). In Miami gasoline declined an average of 55 per cent (from US$4.13 on July 7, 2008 to US$1.87 on January 7, 2009 (refer to Gasbuddy.com ).

For the full letter: 
 http://www.jamaica-gleaner.com/gleaner/20090115/letters/letters2.html

Related:
Petrojam response to Pricing complaints

A shortage of E10, seems to be affecting the Jamaican Petroleum trade and fustrating tanker drivers, services stations and motorists. E10 was official introduced to the Jamaican Market on November 1, 2008  a suggested price roughly JM $2 cheaper than unleaded 87.  On Monday, November 24, 2008, fire struck and destroyed the ethanol cooling tower at PetroJam Refinery. This forced the goverment of Jamaica go overseas for ethanol to power the local trade. It is understood that by February, the cooling tower should be back in operation. In the meanwhile it appears a shortage has developed.

In the week ending December 20, 2008, Jamaica’s Minister of Energy, Clive Mullings, acknowledge that there was a shortage of the product due most in part to the strong demand of E10.  According to one report, the Minister said that, with some 62 service stations providing the fuel, demand has grown to as much as 8,000 barrels per week far exceeding expectations. President of the Jamaica Gasoline Retailers Association, Trevor Barnes, while agreeing that there was a strong demand, pointed fingers at the inadequate loading bay facilities at the refinery and urged the MInister to do something about the matter.

On December 22, 2008, Radio Jamaica reported that there were problems with a malfunctioning pump that at PetroJam that left tanker drivers fuming unable to get E10 after waiting hours. Hopefully all the issues wil be resolved soon as promised by the energy minister in a Gleaner/Power 106 news report of December 23, 2008.

In that news item, Mr Mullings says Petrojam is not experiencing a supply problem, but a problem with the pace at which the fuel is being loaded. He says the ministry has installed a larger motor and has also corrected the problems, which have led to the delays.

We now will wait and see.

Sources: 

• E10 supply hits snag
• Shortage of E10 gasoline to be alleviated
• Mullings promises to eliminate E10 shortage