Time to bring closure to Petrojam affairs, bring down light bills
Lingering issues concerning the operations of Petrojam, its subsidiaries and the energy sector as a whole, need to be placed front and centre early in the coming year, senior trade unionist John Levy and Opposition spokesman on energy, Phillip Paulwell, are insisting.
Speaking with the Jamaica Observer on the weekend, Paulwell said that as a matter of urgency, the Government and sector stakeholders must address the high cost of electricity, which continues to burden consumers and he pointed to the management of the national grid, by the Jamaica Public Service Company (JPSCO).
“We are still some distance away from where a competitive price ought to be, which is about 15 cents per kilowatt hour. There now has to be a greater focus on JPSCO’S efficiency or lack of efficiency when it comes on to the transmission and distribution side of the business. A lot more investment needs to happen and that has to be supervised by the OUR (Office of Utilities Regulation),” he said.
Furthermore, the Opposition spokesman said that Jamaicans were yet to fully benefit from the introduction of liquified natural gas (LNG) into the country’s energy mix. “It was never intended for a sole supplier to command the market. I am yet to see regulations that will govern a competitive environment for Lng...these things will assist in ensuring a reduction in the price of electricity,” said Paulwell, a former energy minister.
In April 2012, Prime Minister Andrew Holness said the then newly commissioned New Fortress Energy-operated floating storage and regasification terminal off the coast of Old Harbour Bay in St Catherine, established the island as a premier LNG hub.
Meanwhile, Paulwell noted that there were some lingering issues concerning the fate of the State oil refinery, Petrojam, that need to receive priority focus in the early months of 2021.
He pointed to the 2019 report of the Petrojam Review Committee (PRC) published over a year ago, noting that among the PRC’S recommendations were that the refinery should be taken off the Government’s hands via a longterm lease arrangement.
The Christopher Zacca-led team, appointed by the prime minister in September 2018 to review Petrojam’s operations amidst a corruption scandal, said divestment was the only option to pursue if the refinery is to remain viable. Since then two boards have been appointed, the most recent being the Wayne Chen-chaired board, named this month.
“Since the Zacca report, the Government is yet to pronounce on the future of Petrojam, it is still my contention that the Zacca report did not indicate sufficient reasons why we should not have a refinery. A refinery adds tremendous value to our economy, to the lowering of foreign exchange for finished products, securing jobs, and adds a significant dimension to our manufacturing sector,” said Paulwell.
“Petrojam has been one of our leading manufacturers for many years. To close the refinery just to allow for imports, a significant value of the economy would be wiped out. So Petrojam continues to be a major issue.”
Earlier this year, permanent secretary in the energy ministry, Carol Palmer, told a meeting of Parliament’s Public Administration and Appropriations Committee (PAAC) that Petrojam would continue to operate as is, while the recommended consultations continue.
Weighing in on the issue, general secretary of the Union of Clerical Administrative and Supervisory Employees (UCASE) John Levy agreed that it was time for a consensus on the future of the energy sector, and that lingering issues around Petrojam should be ironed out swiftly.
“We are hoping that there will be some engagement between the board, the management and the unions to find solutions,” he said, noting, for example, the imminent ending of the partnership between the refinery and British Petroleum, in relation to the Jamaica Aircraft Refuelling Services (JARS), a Petrojam subsidiary.
“That entity used to take up the by-products from the refining process at Petrojam to fuel airplanes. That guaranteed buyer that Petrojam used to have is essentially closing. They’re (JARS) no longer doing business at the two airports. They’re operating at a fraction of what Petrojam normally produces, so that is going to pose a problem for Petrojam,” Levy said.
“Right now they’re relying on two buyers who have no guarantee in place to buy (petroleum by-products) from Petrojam. British Petroleum has majority shares in JARS, which supplies turbo fuel for planes at the island’s two airports in Kingston and Montego Bay.”