Fri | Dec 9, 2016

JGRA: $100 for 87 is unprofitable

Published:Saturday | January 24, 2015 | 12:00 AM

Richard Mitchell, Staff Reporter

THE EXECUTIVE of the Jamaica Gasolene Retailers Association (JGRA), led by Leonard Green, have provided evidence to Energy Minister Phillip Paulwell that it would be unprofitable to sell gas products below $100 per litre.

In a statement, Paulwell acknowledged that the JGRA "provided a number of reasons for the price disparities that prevail in the petroleum retail trade as well as the challenges that have prevented some dealers from reducing their prices in the region of $100 and below".

Some of these challenges come from transportation costs, Green elaborated.

"We have provided numerous invoices on every product from the marketing companies to the minister, and they show that selling below $100 would be unprofitable," Green told The Gleaner yesterday.

Explaining how some gas stations were currently able to sell the 87-octane product for less than $100, Green told The Gleaner that those retailers were losing money.

"Gas stations currently selling petrol at prices below $100 are all currently selling at a loss," said Green, who is president of the association.

NO DECISION ON FIXING PRICES

In the statement from the ministry, Paulwell reminded the public that there is no discussion taking place on fixing the price of gas.

"In the market economy there is no room for price controls; neither is any such measure being contemplated," the statement read.

According to Green, the minister now understood the risks involved if the retailers were to sell their products below $100, and that Paulwell will clarify his statements in subsequent releases to the press. The association calls Paulwell's reactions, "progress".

The meeting held between the JGRA and Paulwell comes as the gasolene group called for the minister to withdraw his statements regarding the prices at the gas pumps. After Petrojam prices fell to $88.90 for 87-octane gasolene, the minister said last week that motorists should be paying less than $100 per litre.

Petrojam currently sells 87 for $89.68.

The Gleaner tried to reach the minister for further comments but was unsuccessful.

richard.mitchell@gleanerjm.com