FACING increased competition and a shrinking market share, Jamaica’s State-owned oil refinery Petrojam continues to bleed billions, with estimated losses for the upcoming fiscal year pencilled in at $1.5 billion.

If achieved, that would be a significant improvement on the approximately $4 billion in losses suffered by the refinery in 2024/25 and a similar amount projected for the current fiscal year which ends on March 31.

The losses at the State-owned refinery were highlighted by Opposition spokesman on energy Phillip Paulwell as he posed questions to Minister of Energy Daryl Vaz during Friday’s meeting of the Parliament’s Standing Finance Committee that examined the Estimates of Expenditure for the 2026-27 fiscal year, ahead of the opening of the budget debate today.

“Petrojam that used to be a profit-making enterprise is losing money three years in a row,” Paulwell remarked before asking what is being done to get the refinery back to profitability

“We are in agreement with the fact that Petrojam has been losing money, and the key loss drivers are stagnant sales volumes due to more competition in the domestic market, and high operating expenses,” Vaz explained.

He noted that Petrojam has been losing market share to other importers and has remained stagnant for the last four years, with approximately 11.7 million barrels sold each year.

According to Vaz, as part of efforts to curtail the bleeding the Government will be looking to cut expenses and increase sales, while looking to source finished products directly from refineries to reduce intermediary costs. Additionally, Vaz said Petrojam will be implementing CAPEX projects to boost revenues, including an increase in asphalt production.

He also pointed to replacement of the catalyst at the refinery, which is expected to boost the production of higher-octane gasoline.

Vaz said additional cost-saving measures include the elimination of discretionary spending, optimisation of inventory to navigate price fluctuations, a freeze on non-critical hiring, and installation of solar panels across the refinery’s five buildings.

The minister reminded the meeting that the consultancy firm Muse, Stancil and Company was engaged by Petrojam in November 2025 to undertake a comprehensive technical and economic assessment of the operating options for the refinery, within the existing framework.

“So we’re at one with it, member, and obviously what we are aiming to do this year is to reduce the losses with a view to try and return to profitability,” declared Vaz in response to Paulwell.

Meanwhile, Paulwell noted that the consultancy firm referred to by Vaz is a full-service global energy consultancy entity, specialising in the midstream and downstream sectors of the petroleum industry. He noted that the firm was engaged by a People’s National Party Government some years ago to provide a pathway forward for Petrojam.

“And that pathway included the expansion of the refinery, but. more importantly, the utilisation of new technology to enable the refinery to be far more efficient,” said Paulwell.

The Opposition spokesman highlighted that the refinery is more than 40 years old and utilises old technology.

Paulwell also sought word from the energy minister if he was committing to implementing the proposals from the report prepared by Muse, Stancil and Company, and if this would mean the Government would not be accepting the recommendations of the 2019 Zacca Report which followed the 2018 “Petrojam scandal”.

That report had recommended that the Government exit the refinery business and lease the operations to private sector interests to boost efficiency.

According to Vaz, the report from Muse, Stancil and Company should be ready by the third quarter of the 2026-27 fiscal year. He told the committee that in terms of technological advancements at Petrojam, several unsolicited proposals have been received, including the use of artificial intelligence (AI).

“It’s very interesting, based on the proposed cost-savings according to what is being proposed. That is something that is being looked at,” said Vaz.

In relation to the Zacca Report, Vaz said, “nothing has changed in the position of Government. What I can say in terms of what has been happening in recent times, the strategic use of the refinery in this region has great opportunities. And, as I said before, there’s a heightened interest, especially over the last few weeks, in terms of persons and companies that are contacting Petrojam with different proposals.

“We will be looking at the proposals to see how we can take advantage, bearing in mind that the refinery has the ability to refine crude oil from Venezuela,” Vaz added.

He said the Government is of the view that having the refinery at this point will turn out to be a better opportunity than what was previously proposed.

PAULWELL…Petrojam that used to be a profit-making enterprise is losing money three years in a row (Photo: Joseph Wellington)

Petrojam’s main facility on Marcus Garvey Drive in Kingston