With the Government nervously watching spiralling world oil prices, Commerce Science and Technology Minister Phillip Paulwell on Thursday called in the energy sector to help figure out how to expedite the state’s programmes for alternative energy use.

The day after, in the wake of the minister’s meeting, crude oil prices rose sharply to a 13-year high of US$40 a barrel, and prices at Jamaican gas pumps jumped to around J$35 per litre, adding impetus to the Government’s concerns.

Taking his cue from Finance Minister Omar Davies’ warning in his budget presentation, Paulwell outlined the bleak outlook on the cost of imported energy, with Jamaica’s fuel bill already at a huge US$850 million per year. An average crude oil price of US$35 per barrel in the fiscal year 2004/2005 could push the fuel bill up to US$950 million and could derail the country’s balance of payments, Davies had said.

In light of the situation, Paulwell’s urgent message to the meeting was: “We are spending about $2 billion a year on electricity, and we’re looking to save 10 per cent.”

At the same time, the discussions took note of the fact that some gas stations were reporting a decline in volume sales, as motorists keep purchases to a minimum in the face of the price increases.

Devon Bourne at the Texaco service station at 31 Constant Spring Road told the Sunday Observer that most of his patrons had not increased their petrol purchases even though the price of petrol at the pumps had increased.

“Persons who used to buy $500 continue to buy $500, so we are in effect selling less and our volume is going down,” he said.

A Shell Station proprietor who asked not to be named said that when the price at the pumps went up, sales in the station’s mini-mart declined. “Patrons who normally go into the mini-mart and make purchases when they buy gas, do not do so when the gas price goes up,” she said.

The Shell proprietor said that in anticipation of the change in the price of gas on a Thursday, drivers stocked up on petrol on a Wednesday.

Minister Paulwell told the Sunday Observer after his meeting that a three-pronged plan designed to show results in two years was being developed. He said that a major energy-saving programme for public institutions would trim $200 million from the Government’s annual $2 billion electricity bill, while other savings would be achieved by establishing wind farms, and replacing the petrol additive NPBE with ethanol produced from locally-grown sugar cane.

The Government’s energy-saving thrust is to begin with the hospitals and a fund has been established to enable them to save energy of up to 10 per cent by using solar water heaters and conducting energy audits. The minister said that an energy fund would also be set up to allow businesses and individuals to do “energy audits” and to procure solar water heaters and other energy-saving equipment.

He disclosed that a wind farm being established at Wigton in Manchester, to deliver about 23 megawatts of electricity of “international grade”, was almost completed and would be commissioned in two weeks. A second wind farm was being planned for the same location and a third for the Palisadoes strip. Other locations were to be added over time, he said.

Paulwell projected that the second wind farm at Wigton could be completed within seven months and if all the proposed wind farms were feasible and finance was in place, “then we can deal with it in a 15- to 18-month period”. But he was unable to say how much additional megawatts of electricity the proposed wind farms would produce, noting that this could not be determined until the feasibility study was completed.

Regarding the substitution of locally-produced ethanol for the additive NPBE in gasolene, the minister said: “We will be adding alchohol, we will be allowed to add up to 10 per cent to our petrol to enable us to defray the cost by producing our own ethanol,” he said.

Paulwell said that the Government would also be spending $20 million on a programme to educate consumers and children in schools on how to save energy. “We’re hoping that the public will also start to put in place energy-saving measures, for example, to turn off the engines of vehicles when they are not in use, for people to car pool and to turn off electricity and use it sparingly,” he said.

The meeting on Thursday night also discussed how Jamaica could source oil at lower prices, noting that 70 per cent of Jamaica’s oil supply was bought from Venezuela and the rest from Mexico and Ecuador. But Paulwell did not hold out much hope for that.

“Venezuela is so close to us. We could not purchase from farther away because shipping cost is very expensive, so it’s going to be difficult to find cheaper sources,” he said.

Petrojam’s managing director, Winston Watson, suggested that additional energy savings could be made by more motorists purchasing 87 octane gasolene instead of 90 octane. “Most of the cars in Jamaica can use 87. The high-performance cars like the Mercedes Benz, BMWs and Audis need 90 octane, but most other cars, especially those from Japan, can use 87 octane,” he said.