Petrojam says motorists spared full impact of global fuel price increases

Petrojam says its pricing mechanism has shielded motorists from the full impact of rising global fuel costs, noting that recent increases in international benchmark prices were not fully passed on in local ex-refinery prices.

The statement comes amid heightened concern about fuel costs following the escalating conflict in the Middle East, triggered by the US-Israeli war against Iran, which has disrupted oil shipments through the Strait of Hormuz—a critical global shipping lane through which about 20 per cent of the world’s oil and gas passes.

In a statement Thursday, the state-owned refinery said movements in the US Gulf Coast reference prices - the key benchmark used to determine regional petroleum prices - showed increases that would have translated to between $8.45 and $12.66 per litre for transportation fuels.

However, Petrojam said its pricing framework softened the effect locally.

“Based on the movements in these USGC reference prices for this week, the price range for transportation fuels reflected increases in the order of J$8.45 to J$12.66 per litre. As designed, Petrojam’s pricing mechanism mitigated the full impact of these increases. Therefore, the full price increases were not passed on in the ex-refinery prices,” the company said.

The refinery added that it continues to monitor developments in the international energy market, particularly movements in US Gulf Coast reference prices, which are used to determine the ex-refinery prices of petroleum products in Jamaica.

Petrojam also sought to reassure the public that fuel supply remains stable, noting that the refinery is maintaining normal inventory levels.

Speaking before Parliament’s Standing Finance Committee on Thursday, Finance and the Public Service Minister Fayval Williams said the conflict has already pushed global oil prices higher and could affect Jamaica.

“Jamaica is an importer of oil, so what happens to oil prices on the global market is expected to have an impact on Jamaica,” Williams said, noting that crude oil prices have risen by about 15 per cent, moving from US$54 to US$74 per barrel since the outbreak of the conflict.

Energy Minister Daryl Vaz has also said the government is closely monitoring developments, while noting that Petrojam’s pricing system helps cushion the local market from sudden global price shocks.

“It is important to understand that crude oil and finished petroleum products are traded in separate markets, and movements in crude oil prices do not automatically or proportionally translate into local pump prices,” Vaz said earlier this week.

Petrojam’s pricing committee, which includes representatives from the Office of Utilities Regulation and relevant ministries, meets weekly to determine ex-refinery prices for petroleum products.

The refinery also urged motorists to manage fuel costs by using the grade of gasoline recommended by their vehicle manufacturers and adopting more efficient driving practices.

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