BE CLEAR ON GAS PRIC­ING

Jamaica Gleaner - - FRONT PAGE - Paul Clarke/Gleaner Writer

THE JA­MAICA Ga­so­lene Re­tail­ers As­so­ci­a­tion (JGRA) is ex­press­ing con­cerns with the pric­ing mech­a­nism used by Petro­jam, ask­ing for a clear and trans­par­ent ex­pla­na­tion. The or­gan­i­sa­tion is also trou­bled by the ex­ces­sive losses of fuel be­ing in­curred by Petro­jam since 2013.

These were among a num­ber of is­sues brought to light in the just tabled Au­di­tor Gen­eral’s re­port into the op­er­a­tions at the Petroleum Cor­po­ra­tion of Ja­maica (PCJ) and its af­fil­i­ate, the state-owned oil re­fin­ery, Petro­jam, which JGRA’s pres­i­dent, Gre­gory Chung, found quite alarm­ing.

“The JGRA is join­ing the call for a foren­sic au­dit of the en­tity and to put the nec­es­sary mea­sures in place to cau­terise the losses,” Chung said.

The Au­di­tor Gen­eral’s scathing 113-page re­port, which was tabled in Par­lia­ment on Tues­day, ques­tioned Petro­jam’s pric­ing mech­a­nism. It pointed out that ow­ing to the ab­sence of min­utes for meet­ings held, it could not be de­ter­mined whether the mar­ket

ad­just­ment of fuel was al­ways de­ter­mined in a trans­par­ent man­ner.

But ac­cord­ing to Chung, the saga around how the gas prices are cal­cu­lated has been an on­go­ing bat­tle for the JGRA.

“Some time ago the oil prices were down, com­pared to four years ago when it was at an all-time high, and the pub­lic was say­ing why the price of fuel was so high. At one point, the then fi­nance minister had said that it was the re­tail­ers who were re­spon­si­ble for the high price,” Chung said.

As a re­sult, he stated that the JGRA un­der­took its own ex­am­i­na­tion of the is­sue and what it found was that the cost of fuel was a big prob­lem. Chung said that part of it was the tax, and an­other part of it was the ex­change rate.

“We sub­se­quently met with a com­mit­tee that was formed to make a rec­om­men­da­tion to Petro­jam. There was an ini­tial meet­ing with them and we ex­pressed our con­cern that, yes, it’s based off the Golf ref­er­ence pric­ing and other el­e­ments, but there was this other el­e­ment, and I be­lieve that’s what the Au­di­tor Gen­eral al­luded to in her re­port to the Par­lia­ment,” the JGRA boss noted.

“It is now time for a clear ex­pla­na­tion on this. The re­port is telling us what many had sus­pected, but I think the minister, who is also the prime minister, should speak on this.”

IT’S NOT ROCKET SCI­ENCE

Chung said the un­cer­tainty came about when the price of oil was around US$60 per bar­rel, not­ing that it was never re­flected at the pumps.

“Then in 2012, when the price of oil was over US$100 per bar­rel, it was re­flected at the pumps at the lower end, so we found that strange. Now with this com­ing out, we are say­ing let’s have a clear, sim­ple way for Ja­maica to un­der­stand in a trans­par­ent way how oil is priced. It’s not rocket sci­ence,” Chung de­clared.

Chung is call­ing on Prime Minister An­drew Hol­ness to act swiftly to re­store con­fi­dence in Petro­jam and the en­tire petroleum trade, with a fo­cus on pric­ing, con­tracts and their im­pact on na­tional de­vel­op­ment.

“We are hop­ing that he puts enough en­ergy be­hind this. He is in charge of other mas­sive port­fo­lios, and we would like to give him the op­por­tu­nity to be suc­cess­ful at this en­ergy min­istry port­fo­lio un­til he ap­points some­one there. But at the same time, we are giv­ing him time to re­spond to this Au­di­tor Gen­eral’s re­port,” said Chung.

CHUNG

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