Jamaica Gas Prices

PetroJam has announced that this week, motorist will get a break from the rising petrol prices. Indeed  87 and 90 octane remain basically flat, while diesel decreased by about JMD $0.50. On the world market the price of Oil has fallen from its high of USD $135 per barrel to the low USD $120s.

Some analyst beleive that point has reached where motorist especially in the USA are becoming resistant to the higher prices as the fund. In Jamaica we have already seen that the demand for petrol has fallen off by 10% with predictions for this to worsen in the summer period.

Reports are now surfacing that Gas Sales has fallen as much as 10%.

The Jamaica Gleaner reports, that retailers have seen a 10% drop in volumes at the gas pumps.  The retailers believed the situation will get worse in the summer holidays when schools are out and volumes normally decline.

In the USA, they have also seen a decrease in the number of miles driven that Americans are doing for the first time in 26 years.

All this is driven by the record Oil prices that the world has seen in the last few weeks. Oil Prices have hit a record high of US $135 per barrel.

Yesterday, ex-refinery prices on Petrol announced by PetroJam increased by between $2.89 and $2.96.

Related:
You can read the full story here Gas retailers report one-tenth drop in sales - Edwards says summer will be challenging

The writing is on the wall. It is going to be a bad summer as Oil prices continue its march to that $150 mark. Once again Jamaicans will have to deal with massive increase at the pumps once again. The world is definitely facing a serious energy crisis.

It now seems that the tipping point has been reached and Jamaicans are now reducing their expenditure at the pumps. The Jamaica Gasoline Retailers Association president, Errol Edwards,  reports that in recent times there has been a 5-7% reduction is the amount of gas being sold. He is more than right in blaming the high gasoline prices for this reduction.

On a day when Oil prices rose to a new high of US$127 per barrel of Oil, Jamaicans are evidently finding the high prices troubling.  Jamaican consumers are also being hit with higher food, transport, water and energy costs.

There are projections that the price of Oil could average $141 for 2008, with some analysts predicting Oil Prices of US$200 per barrel.  Jamaican consumers will now have to make every effort to conserve.

There has been no reduction in demand for Gasoline in Jamaica despite rising Oil Prices. Words to that effect were uttered by a Mrs. Ruth Potopsingh of the Petroleum Corporation of Jamaica(PCJ). I heard this while listening to Power 106 FM’s Independent Talk program on Monday, January 14, 2008.

Interesting the problem seems to be the same in Barbados where the gentleman from the island ,speaking on the same program, even hinted that there was possibly and increase in demand there. At some point, demand will have slacken off. Oil Prices at this point and it sustained consumption is likely to have serious effects on the economies of Caribbean Countries.

What is needed is a serious conservation push by the authorities. In Jamaica, that message is slowly coming out. The problem in Jamaica is that on one hand , the motor vehicle is seen as a status symbol more than utility, while on the other, the poor public transport system, despite its improvement, still remains inadequate.

For now, the demand for Gasoline remands inelastic but for how long?