Dear Editor,

I’m not exactly a fan of oil hedge, because the last time Jamaica hedged oil at US$66 per barrel they lost a lot of money the country couldn’t afford. But, if ever there was a time to do it, there’s no better time than now.

The global oil price has crashed mainly because of the coronavirus pandemic. The entire world is in a lockdown mode. Therefore, the demand for oil and other petroleum products is way down. Even before the pandemic, oil prices were under a lot of pressure because, simply put, the demand was not there. In other words, there’s a lot more oil in the market than is required.

Come to think about it, in normal times, if countries like Iraq, Libya, Iran, and Venezuela had been exporting their normal output it would have made matters much worse. I’m not going to shed any tears for the Organization of the Petroleum Exporting Countries (OPEC), as Big Oil, along with Wall Street speculators, ripped off the Third World and developing countries for years with their $100 per barrel oil. It was only Venezuela, under Hugo Chavez, that came to their rescue. The rest of the world, who are in the vast majority, should never allow this to happen again.

Green energy, along with electric cars and hybrid buses, should further bring down the demand for petroleum products, mainly gasoline.

Jamaica should take full advantage of this price freefall by locking in the price of this commodity for future delivery. Also the society should demand that these oil price savings be passed down to the consumer. There’s a tendency by various administrations to use those savings as general income, which shouldn’t be. It should be passed on because when the price of oil was well over a $100 per barrel the population grinned and bore it. So when the price drops considerably, like now, the country should benefit overall. If this is not forthcoming, I expect to see massive demonstrations all over the country.

In 2014, when there was a price meltdown, instead of lowering the price of gasoline it was raised. The lame excuse given was that it was not only oil that goes into manufacturing gasoline. Yet when the price of oil goes up gasoline prices go up simultaneously. So what is the explanation for that? Is it that they want to insult people’s intelligence.

Noel Mitchell

Westchester, New York, USA

nlmworld@yahoo.com