Mon | Apr 24, 2017

Montague’s nonsense about Petcom

Published:Wednesday | February 25, 2015 | 2:00 AM

When Andrew Holness reshaped his shadow Cabinet last month, we advised his team on a new approach to policy formulation and discussion. They should think before they speak.

Further, we suggested that the Jamaica Labour Party (JLP) establish serious policy groups, comprising not necessarily party members or supporters, to help it work through ideas and arrive at credible programmes. The opposition leader's task force on the economy, though more appropriately manned, could be a useful model for these groups - assuming they actually produce results, which we do not know is the case with the Aubyn Hill team.

It seems that the JLP, if it paid attention to our suggestions, misapprehended what was said. The shadow Cabinet has since then produced a flurry of statements on myriad issues. Well ... just that ... plenty of words. Except that it has now been taken to the extreme of thoughtlessness by its spokesman on energy, Bobby Montague.

In a statement this week, Mr Montague said that his party is against the Government's plan to divest the Petroleum Company of Jamaica (Petcom), a subsidiary of the Petroleum Corporation of Jamaica, which owns petrol service stations as well as markets and distributes liquified petroleum gas, which is widely used for cooking.

According to Mr Montague, his party actually believes in private ownership and "endorses divestment of government assets". But not this one. And certainly not at this time.

Clearly, neither Robert Montague nor the JLP is socialist. The party believes, he says, that the private sector should control "the commanding heights of the economy", reprising a phrase that we thought was long passed from Jamaica's ideological lexicon. But with two other major distributors of cooking gas controlling 80 per cent of the market - we suppose that translates to its commanding heights - "Petcom acts as a balancing force".

The logic, of course, escapes us. But it gets better - or worse. "It is the inclusion of more players that is needed so as to reduce prices," he says.

 

continued ownership of Petcom

 

So, the Government's continued ownership of Petcom - which lost J$55 million last year and J$39 million the year before that, and taxpayers continued embrace of these deficits - is to be the obvious hand that manipulates the market to keep prices reasonable. Mr Montague also makes some murky, impenetrable remarks about small, undercapitalised players that would be unable to purchase the Petcom assets.

Now, we have a few other bits of advice to Mr Holness and his shadow Cabinet. First, place a moratorium on statements by Mr Montague until he emerges from his haze. And, very important, trust an appropriately regulated market. Creative, entrepreneurial players will make rational decisions that produce profit for themselves and the best prices to consumers.

Indeed, this assumption of the State as nursemaid or benevolent overseer is what created a bulging bureaucracy and wanton forays in loss-making enterprises, helping to amass a public debt of nearly 150 per cent of GDP, whose reversal is a large part of the cause of the fiscal austerity now faced by Jamaicans. What Mr Montague and his party colleagues, and others who do not believe that the State should control the "commanding heights" of the economy, should be telling the Government is to move full speed ahead with divestments - of ports, airports, hotel and petroleum and other enterprises.