Jamaican business fuel anxiety surges on global oil spike

Concern among Jamaican businesses about fuel and transport costs nearly doubled in a single survey period, as rising oil prices push inflation expectations above the Bank of Jamaica's (BOJ) target range.

The share of businesses citing fuel and transport as their top input cost pressure rose to 18.3 per cent in April from 9.7 per cent in February, according to the BOJ's April 2026 Survey of Businesses' Inflation Expectations, conducted by the Statistical Institute of Jamaica between March 23 and April 22.

Utilities also rose, with 30 per cent of respondents naming them their primary cost concern, up from 24 per cent. The island's power utility passes fuel costs directly to consumers, signalling a nexus between both operating expenses (NOT CLEAR). Concern about all other expense categories — stock replacement, raw materials and wages — eased.

"Of the stated inputs, wages and salaries are expected to increase at a lower rate over the next 12 months relative to expectations from the February 2026 survey," the report stated.

The fuel anxiety translated into real price increases. Gasolene (87 octane) climbed more than 15 per cent, from J$163.38 per litre on March 19 to $189.88 on May 14 — a $26.50 movement in eight weeks. Auto diesel rose from $175.75 to $197.50 over the same period, according to Petrojam, Jamaica's state-owned refinery.

The survey canvassed 334 chief executive officers, managing directors and financial controllers. It was conducted against a backdrop of heightened tensions around the Strait of Hormuz — through which roughly one-fifth of global oil supply passes — following the US-Israel military campaign against Iran, which has contributed to elevated crude prices and shipping risk premiums globally.

Businesses now project inflation 12 months ahead at 7.1 per cent, up from 6.5 per cent in the previous survey, and see year-end inflation at 6.4 per cent — above the BOJ's 4.0 to 6.0 per cent target band. The March 2026 actual outturn was 4.3 per cent.

Confidence has deteriorated sharply. The Future Business Conditions Index fell to 114.6 from 143.6, reflecting fewer respondents expecting improvement and more expecting deterioration. The Present Business Conditions Index dropped to 69.2 from 81.2, the lowest level in at least three years.

The currency outlook compounded the pressure. Businesses project exchange rate depreciation of 2.7 per cent over the next 12 months, reversing expectations of appreciation recorded in the previous survey. A weaker dollar raises import costs across the board.

Businesses' confidence in the authorities' management of inflation also fell, driven by a decline in the proportion of respondents satisfied with how inflation is being controlled, the report stated.

carolyn. guniss@rjrgleaner.com