Wed | Apr 21, 2021

High oil prices

Published:Sunday | September 27, 2015 | 12:00 AM


I note with continuing dismay the high prices of petroleum products. It is a fact that the price of oil has a massive impact on the cost of living. The price of oil is a significant portion of the average consumer's monthly expenditure. We tend to think of that mainly in terms of our JPS bill or the fuel we put in our cars but that's being simplistic.

In reality, the input cost of oil has a far greater impact. Every single product or service we purchase during the course of our daily economic activity has a petroleum component factored in. Products have to be manufactured using electricity and delivered using fuel. The store that sells that product has an electricity bill to pay. The list goes on.


astronomically high


Why is it that fuel costs are still astronomically high, despite the near-record lows of international oil prices? Crude prices have been trending down for several months now. When international per barrel rates goes up, even incrementally, the effect is immediately heard and felt locally. Petrojam announces increases, JPS bills reflect fuel surcharges, and consumers feel the pain. Yet now, with prices on a downward trend and hitting record lows, the expected downward adjustments are disproportionately small in comparison.

I can recall the Private Sector Organisation of Jamaica stridently questioning Petrojam's pricing mechanism. It developed into a public spat between the PSOJ's head, Mr William Mahfood, and Petrojam, with various claims and counter-claims being made in the media.

Though there was an inherent element of self-interest in the PSOJ's protestations, the public cheered him on as we would all benefit from any reductions. Strangely, with no apparent change in the Government's position, the PSOJ fell silent on the matter. Then, lo and behold, they emerge on the eve of an impending general election announcement with a ringing endorsement of the current fiscal policies. There's an expression I consider appropriate here - 'Things that make you go hmmmmm?'

Rajendra Jadusingh

Disgusted and disillusioned consumer