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JGRA ready for new round over gas contracts

Published:Friday | December 11, 2015 | 12:00 AM
President of the Jamaica Gasolene Retailers Association, Leonard Green.

JGRA ready for new round over gas contracts

Neville Graham

Business Reporter

Renewed rumblings from the petroleum sector indicate that the Jamaica Gasolene Retailers Association (JGRA) is planning to resist the imposition of new contracts by marketing companies.

The group says it is already consulting with stakeholders in the petroleum distribution and retail trade to garner support for what it expects will be another protracted fight with the suppliers of fuel.

JGRA President Leonard Green says so far, his executive has met with dealers in the eastern and the western ends of Jamaica, and was next to meet with those in central Jamaica to include St Catherine, Clarendon Manchester and St Elizabeth, before concluding with dealers on the northern side of Jamaica.

"Simultaneously, we are meeting with other stakeholders, including the haulage contractors and the unions that represent our workers," Green added.

The rumblings go back as far as a year ago, when dealers complained of being pressured to sign voluminous contracts which they felt were one-sided. A flurry of meetings, hosted by Energy Minister Phillip Paulwell, took the matter off the radar as the Fair Trading Commission and the Office of Utilities Regulation were called in to help resolve the impasse.

Green says the FTC has been deliberating for the last seven months and the "understanding was that the marketing companies would have stayed their hand until a clear determination was made". However, he adds that they are drawing up contracts, even though the basic disagreement remains unresolved.

Representatives of marketing companies were not immediately available for comment.

Green charges that the approach taken by Rubis, Total and GB Petroleum amounts to "strong-arm" tactics that is impacting both their business relationships as well as dealers' standing and importance in the petroleum industry.

"When a marketing company comes and moves you from a dealer contract to a bare licence contract, the marketing company is basically removing all your privileges and rights as an entrepreneur and reducing you to a bare licensee - just giving you authorisation to use their name and sell their products. You have no rights whatsoever," he declared.

Green adds that dealers are made to bear the brunt of the costs under the payment arrangements for petroleum products.

"We pay for that product COD [cash on delivery] to the marketing company, which gets two weeks' credit from the Government of Jamaica through Petrojam," the JGRA president charged.

"We have evidence to show that these marketing companies have consistently withheld or increased their margins over the time so that they do not pass on the Petrojam-announced reductions. They hold these margins at the expense of the motoring public," he said.