LOCAL gas prices will reach a record high today, as international oil prices continue to rise.

Petrojam’s weekly adjustment, being made today, will put the price of a litre of 87-octane gasoline leaving the state-run refinery at J$56.1769, while 90-octane will be priced at J$57.6199 per litre, placing the price of petrol at the highest it has been on record, in nominal terms, and 17 per cent higher than it started 2007.

Ultimately, the increase will translate into record level prices at the pump for motorists as Observer surveys in the past show that gas retailers’ markup on the fuel range anywhere from five to 30 per cent.

The price for diesel at J$46.2197 per litre fell considerably short of record levels – J$50.5697 per litre – but was still 10 per cent higher than at the beginning of the year.

Local gas prices typically reflect movements in international oil prices, as Petrojam periodically purchases oil, largely from Venezuela, to refine gasoline and other fuel for domestic consumption.

According to Dr Raymond Wright, former head of the Petroleum Corporation of Jamaica (PCJ), Petrojam’s parent company, and consultant to the firm, there is usually a two-week delay in local price movement on changes in the world oil market.

Two weeks ago, the price of light, sweet crude for June delivery rose 26 US cents to US$ 61.87 a barrel in mid-morning Asian electronic trading on the New York Mercantile Exchange, after the US government agency, the Energy Information Administration (EIA), reported an imbalance in inventories.

The following week prices moved up even further to US$62.42 a barrel after Royal Dutch Shell PLC said that community protests had cut production in Nigeria by 170,000 barrels per day.

Yesterday, oil prices climbed even further after the EIA reported gasoline stocks falling short of average levels at the kick-off of the summer driving season.

Light, sweet crude for July delivery rose 41 cents to $65.92 a barrel in afternoon trading on the New York Mercantile Exchange, while Brent crude for July delivery climbed 94 cents to $70.46 a barrel.

Using the two-week lag that Dr Wright suggested, local gas prices are likely to increase over the next two weeks.