Sun | Dec 17, 2017

Shaw blasts gas station operators

Published:Thursday | October 5, 2017 | 11:46 AM
Shaw

Finance Minister Audley Shaw has come out swinging at petrol station operators whose pricing policies, he says, have dampened consumer confidence while potentially giving rise to inflation.

Shaw said he would formally write to Energy Minister Dr Andrew Wheatley and Commerce Minister Karl Samuda, asking them to investigate what he’s described as the unfair pricing policies of persons involved in the petroleum trade. Minister Shaw said he has also asked for an explanation from the Petroleum Corporation of Jamaica (PCJ).

Shaw, who was addressing day-two of the inaugural natural gas conference at The Jamaica Pegasus hotel in New Kingston on Thursday, said the PCJ must explain why Jamaicans were being asked to pay such high prices at the pump when world oil prices have remained relatively stable for some time. He lamented that as the price of oil falls on the world market, there’s no corresponding fall in prices at the pump.

“Something is wrong,” Shaw stated, as he argued that such volatility in pricing where one gas station may sell fuel for $115 per litre and another for up to $170 per litre, can result in negative consumer confidence.

“We cannot afford to be held hostage to any kind of system that’s open to abuse and ends up abusing consumers and the ability of the country to be competitive,” said Shaw. He also argued that such a practice can have a negative effect on inflation.

The finance minister said the country on a whole is affected by such practices which inhibit the ability of manufacturers to be competitive. He revealed that he had already asked both the Planning Institute of Jamaica and the Bank of Jamaica to examine the matter. His decision to now ask Commerce Minister Karl Samuda to further probe the matter, he said, is guided by the fact that Samuda has responsibility for the Consumer Affairs Commission. He said the issue must be examined in a transparent manner to ensure consumers are not being abused.

The state-owned oil refinery, Petrojam, has defended its pricing mechanism which is guided by the US Gulf Reference Price system that would take such things as the foreign exchange rate, into consideration. The defence of the system has come despite repeated calls for change, including from the parliamentary opposition. Marketing companies add their respective mark-up.

However, even petrol stations that operate under the banner of the same marketing company and in close proximity to each other, reflect wide discrepancies in their prices.

The natural gas conference which concludes on Friday, is examining the benefits of the introduction of the gas to Jamaica’s increasingly diverse energy mix. It is being attended by the who’s who in the energy sector, academia, finance, the environment, tax policy and regulation. Participants are drawn from Jamaica, the Caribbean and further afield.