Dear Editor,

The current Russia-Ukraine war has led to unprecedented volatility in the supply and prices of petroleum products locally and internationally. Global oil markets have reacted to the events of this crisis, with prices even soaring to a near 14-year high of US$140 per barrel in March 2022.

As we can all appreciate, this is a global phenomenon that is not unique to Jamaica.

In March, the average cost for a gallon of regular gasoline in the United States rose above US$4 for the first time since 2008, hitting over US$6 per gallon in some areas of Los Angeles, California.

In Europe, gas futures have been surging to record highs as traders anticipate the energy shortage will last into 2023, putting financial pressure on households and businesses across the region.

And so, like other parts of the world, our nation has been experiencing the effects of high fuel prices on the spending power of households and businesses. However, rest assured, our company is making every effort to ensure uninterrupted fuel supply to the country, and at the most competitive prices.

It is important to note that, throughout this crisis, Petrojam’s product price movements have consistently correlated with that of other regions, particularly the US Gulf Coast region to which our prices are indexed.

Some analysts surmise that the risk of disruption to supplies has not yet been fully priced in, and we may be poised for further upward oil and product price movements.

Conversely, the industry is prone to volatile swings in the price of oil and there are also factors which push prices downward from time to time. For example, the recent decision by the USA to release 180 million barrels of oil from its Strategic Petroleum Reserve, aimed at easing the price pressure on oil. However, the immediate impact can be short-lived as, since that time, we have witnessed fluctuations in oil prices due to different events of the war.

A major lesson that this war and other such geopolitical events have reminded us of is the importance of having a refinery here in Jamaica.

During these difficult periods, small economies such as ours usually find it more challenging to source refined products and crude oil. In fact, crude is always easier to source than finished products in times of conflict or natural disasters.

It is Petrojam’s refining capabilities that gives Jamaica an advantage in meeting the energy demand of its domestic and commercial sectors during such challenging periods.

We understand the economic challenges brought on by the rise in fuel prices and empathise with the nation as we navigate together the challenges of this crisis.

As a price-taker in the global petroleum industry, with no influence or power to affect the price we pay for crude, it is for us at Petrojam to carefully manage these situations to ensure a reliable supply of petroleum products to the nation during unstable times.

As do all Jamaicans, we hope for the earliest resolution to the Russia-Ukraine war and for a simultaneous ease in its impact on global oil markets. I appeal to us all to do everything within our power to cushion the impact of the rise in fuel prices.

Where possible, let us endeavour to adopt fuel conservation measures, such as driving at moderate speeds, keeping tires properly inflated, and performing routine maintenance on our vehicles to ensure they burn fuel efficiently. Such small efforts can reap positive results incrementally.

As our company commemorates 40 years of service to Jamaica, Petrojam remains committed to our mandate of providing high-quality and competitively priced petroleum products to the Jamaican market.

Winston Watson

Managing director

Petrojam