Energy Minister Daryl Vaz at Wednesday morning’s post-Cabinet press briefing (Photo: Joseph Wellington)<\/p>\n
KINGSTON, Jamaica \u2014 While warning that the Government could possibly examine policies to limit movement as the country faces a significant crisis regarding international oil prices, Energy Minister Daryl Vaz says every Jamaican has a responsibility to conserve energy.<\/p>\n
He made the call at Wednesday morning\u2019s post-Cabinet press briefing as he outlined the Government\u2019s response to the economic strain caused by the conflict in the Middle East and its impact on Jamaica\u2019s oil pricing.<\/p>\n
\u201cMy words to you Jamaica is, definitively, \u2018You\u2019re gonna see increases [in oil prices] as long as this [conflict in the Middle East] continues\u2019. We [the Government] will do what we can do, but it is important that you do what you need to do to understand that you need to conserve starting today, today, today,\u201d the minister stressed.<\/p>\n
He noted that the Government will likely explore policies to limit movement, specifically transportation, and suggested the possibility of returning to a \u201cCOVID-hybrid\u201d version of working from home to reduce fuel consumption.<\/p>\n
But he emphasised that the Cabinet will ultimately decide on what final plans will be announced to conserve energy.<\/p>\n
\u201cThe Government is gonna have to look at policies to limit movements, especially transportation movements. I don\u2019t know\u2026 whether or not we go back to a COVID-hybrid version of working from home; something has to happen, because the level of traffic that I am seeing on the road doesn\u2019t show me that anybody realises that there\u2019s a war and the price of fuel\/oil is going to go up, and up, and up,\u201d Vaz said.<\/p>\n
He added, \u201cI am sure that Cabinet will deliberate, the Government will come up with plans as to how to conserve [energy], but it is 100 per cent the responsibility of every Jamaican to realise that we are in a major, major crisis as it relates to the price of oil internationally, and therefore, you need to take responsibility for your household, your business, [so] see what you can do.\u201d<\/p>\n
At the same time, Vaz said that despite the market volatility, Jamaica\u2019s energy security remains intact due to established finished product supply contracts and the local refining capacity at Petrojam.<\/p>\n
\u201cSo, it\u2019s not a matter of not being able to buy [oil]; it\u2019s the price. So there\u2019s no need to panic,\u201d he declared.<\/p>\n
Earlier, the minister advised that the Government \u2014 through Petrojam, the Energy Ministry and the Finance Ministry \u2014 has taken deliberate steps to, among other things, mitigate the full pass-through of global price increases, and protect consumers from sudden and sharp fuel increases.<\/p>\n
Additionally, Petrojam\u2019s pricing committee continues to monitor market conditions and adjust ex-refinery prices accordingly.<\/p>\n
However, Vaz pointed out that while the current mechanism has been effective in cushioning customers, it has resulted in \u201csignificant financial losses by Petrojam\u201d, which is between $1.3 billion and $1.4 billion. That loss was not passed on to Jamaicans.<\/p>\n
\u201cIf we continue the current pricing mechanism up to June 2026, it would cost the Government of Jamaica $11.8 billion, which is unaffordable, and unsustainable and, is, in fact, two-thirds of this budget year\u2019s revenue measures,\u201d Vaz informed.<\/p>\n
Pointing to the breakdown in talks between Iran and the United States, Vaz said he was hopeful that there would be a resolution, noting that the discussions appear to be \u201cgoing in the wrong direction since Monday\u201d.<\/p>\n
In response to the high oil prices globally, Vaz said Cabinet has considered a revised new tiered pricing mechanism, designed to allow for controlled and predictable adjustments, maintain consumer protection for smaller increases and enable greater flexibility during larger global price shocks.<\/p>\n
As of Wednesday, he said the new pricing mechanism to be used by Petrojam to respond to the fuel uncertainty will entail a \u201ctiered approach\u201d, which will see petroleum prices being more closely aligned to global price movements.<\/p>\n
\u201cThis will allow Petrojam to be more agile and respond in a more timely manner to price volatility. What does that mean? It means that the $4.50 cap [on fuel] cannot be sustained, and it means that we\u2019ll have to have several different tiers of caps \u2014 probably three \u2014 that will speak to what\u2019s happening in the market and, as I said, pricing is weekly. So it means that we can adjust on a weekly basis,\u201d Vaz explained.<\/p>\n
\u201cBut let me be blatantly and truthfully upfront in your face; the Government of Jamaica cannot stomach an $11.8 billion [loss] with all of what we have to do and all of the contending priorities, and anybody who tell you any [thing] different\u2026 rubbish! No Government in a situation like this can sustain that,\u201d the minister argued.<\/p>\n
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