Sat | Sep 22, 2018

Petrol standards launched to tackle bad gas

Published:Friday | December 1, 2017 | 12:00 AMSteven Jackson
Executive Director of the Bureau of Standards Jamaica, Stephen Wedderburn.

The Bureau of Standards Jamaica, BSJ, and energy interests are now testing gas from shipping vessels that end up for sale at the pump in an attempt to avoid a recurrence of last year's bad gas distribution.

The sector remains on board with the testing, but concerned about the transportation of the fuel and the insurance costs surrounding it.

In late 2015, scores of motorists across the island suffered from contaminants in gasolene.

The BSJ launched the National Petroleum Codes on Thursday to codify this drive to offer better testing for the industry.

"So right now, all petrol has to be tested even before it is released into the market," said BSJ Executive Director Stephen Wedderburn in conversation with the Financial Gleaner following the launch of the codes on Thursday.

"This is new because before now, there was not a specific requirement that the product had to be tested," he said.

The code addresses five main standards relating to petrol, liquid petroleum gas, lubricants, biofuels and change of custody. The sector will adopt these codes, but they are not legally binding.

"The BSJ stands ready to offer assistance to refine the code and have them implemented. The BSJ recommends that the Ministry of Science, Energy, and Technology take further regulatory action and make the code mandatory. We believe the standards should be mandatory," said BSJ Chairman James Rawle at the launch.

Tracking the chain of custody, and in particular the transportation of the fuel from marketing company to gas station on tanker trailers, remains an issue still being explored. There are concerns about the coverage of the tanker trailers, drivers, the fuel, the surrounding property, the environment in the event of an accident.

There are various types of insurance that are relevant to haulage contractors and marketing companies, but few take up all available, according to Sheraley Bridgeman, vice-president for business development at Guardian General Insurance Jamaica Limited.

Bridgeman said it is rare for sector interests to purchase comprehensive coverage, public liability or coverage for goods in transit. Comprehensive policies would cover damage to the tanker, other vehicles, and damage on the road; public liability would cover damage at commercial premises such as gas stations and includes seepage and damage while onloading or offloading; and coverage for goods in transit would deal with damage to the oil contained in the tanker.

Third-party insurance remains the most common coverage, when utilised, she told the Financial Gleaner following discussions at the BSJ launch. It costs some $200,000 per annum to insure a tanker as third-party for policyholders with no-claim discounts, Bridgeman indicated, saying it would cover road damage to other vehicles and property for up to $40 million.

In 2015, hundreds of motorists complained of vehicular problems associated with bad gas. A specially formed entity, the Petroleum Trade Reform Committee, was appointed by the Government to probe the faulty gas, but it was unable to specifically identify the source of the contaminated fuel.

The committee made 38 recommendations, 15 for immediate implementation to reduce the possibility of a recurrence.