Opposition spokesman on energy, Phillip Paulwell is urging the Government to suspend its pricing mechanism for fuel to help cushion rising fuel prices which he says will get higher with the ongoing war between Russia and Ukraine. 

Since Russia invaded Ukraine on February 24, the price per barrel for oil has skyrocketed, reaching as high as US$120 per barrel. Projections are that it could hit the US$150 per barrel mark in the short term.

According to Paulwell, a former energy minister, the situation is now an emergency. He called for the suspension of the pricing mechanism by the state-owned oil refinery Petrojam, during last Thursday’s sitting of the Standing Finance Committee. He asked the current energy minister, Daryl Vaz whether that was something the government would be willing to do in light of weekly increases in the price of fuel and the ripple effect this has on the wider economy.

“I remember in my time [as energy minister] during the period of one hurricane, we had to suspend the pricing arrangement briefly to accommodate the emergency situation,” Paulwell said as he described Petrojam’s pricing formula as “the rigid price formula”.

“Would the government be prepared to contemplate that now as we have seen every week, record price levels in this area; a record that is much higher than the [oil] crisis of the 1970s, the crisis of the 1980s and it is happening every week,” Paulwell remarked.

“Would the government be prepared to contemplate the easing of that and especially because I see you are forecasting a profit of $2.4 billion for Petrojam this year?” he added.

Responding to the questions and the suggestion, Vaz said “That obviously would have to be a matter that would have to be discussed and considered both as Cabinet and Ministry of Finance consultations”.

“Obviously, in any scenario like that, it may require a subsidy and therefore, based on all that’s happening with the [COVID-19] pandemic etc and now this, it wouldn’t be something we could just do without deeper consultation and review but I’ll take your suggestion on board”.

Paulwell asked Vaz whether it was “acknowledged that consumers and businesses are really experiencing a period of difficulty now, and that the government is prepared to consider relaxing the pricing mechanism?”

Vaz acknowledge the difficulties being experienced by both individuals and businesses but stuck to his position.

“As I said, that has fiscal implications and therefore obviously if I made such a commitment at this place, I may not be here next year,” he said.