Petrojam checking accuracy of PSOJ study
Petrojam Limited yesterday said it was checking the accuracy of an analysis presented by the Private Sector Organisation of Jamaica (PSOJ) which concluded that the State-run oil refinery is passing on less than half of the reductions in global oil prices.
The analysis, which was conducted by the research department of the PSOJ from January to November this year, stated that the Petroleum Corporation of Jamaica (PCJ) closely aligned its price increases with that of global oil prices, but was not as responsive in passing on the decreases. Additionally, retailers have been following the same pattern of response to cost movements from PCJ.
The PSOJ is now calling for some transparency in PCJ’s fuel prices, amidst the refinery’s recent claim in an advisory entitled ‘Gas Prices Explained’ that its prices were “fair and transparent”.
“If you look at the statement we sent out, you will see that there are some discrepancies in the figures of the PSOJ and Petrojam,” Public Relations Officer Latoya Pennant told the Jamaica Observer.
“I’m not sure how the PSOJ came to the conclusion that we are only passing on 12 per cent of the reduction in oil prices from the US Gulf Coast (USGC) reference price, so we are going over our figures to see if we can get the same results,” she added.
In its report, Petrojam indicated that it had reduced gas prices by approximately 25 per cent at the retail level, over the six-month period ending December. The refinery added that its prices closely correlated with price movements in Miami, Florida, where the price of regular gasoline was reduced by 24 per cent and 19 per cent for premium gasoline over the same period.
However, the PSOJ report, which quoted the most widely used benchmark for crude oil in US, West Texas Intermediate (WTI), along with the USGC reference price, from which PCJ benchmarks its price, concluded that when the USGC reduced its oil prices by 30 per cent in June, the PCJ only reduced its prices by 12 per cent.
Yesterday, Pennant said that Petrojam had hoped to have a response provided to the public by the end of yesterday. However, there was no word from the company at press time.
The Petrojam oil refinery in Kingston.