Retail gasolene prices at the pump have been skyrocketing since January, the result of more than 30 per cent increase in the refinery price so far this year.
Last week, at the retail level, the price for regular gas ranged from a low of $228 per litre at some petrol stations in Portmore to more than $300 in the Ocho Rios/Discovery Bay corridor, a snapshot of some stations showed.
At the wholesale level, the ‘ex-refinery’ price charged by Petrojam for bulk supplies hit a new record on Thursday at $215.89. Gas retailers typically add their margins to the wholesale price.
Year to date, the price of wholesale gas is up 30.8 per cent from $165 at the end of December.
Pertrojam Limited, the sole refinery operating in Jamaica, adjusts the price of gasolene supplied to the petroleum trade on a weekly basis. Of the 23 weeks of adjusted prices so far this year, the cost of regular gas – 87 octane – fell seven times but still resulted in an overall increase of more than $50 over the period ending June 9 because of the number of price hikes.
Premium gas – 90 octane – is also up by 29.6 per cent year to date, diesel by 36 per cent, and ultra low sulphur by 33 per cent.
The weekly price adjustments have meandered within a range of 25 cents to $4.50 for all categories of gas sold by Petrojam.
Petroleum products sold on the Jamaican market are based on the USGC – the US Gulf Coast Conventional reference price, which price represents the cost of the product in the largest geographical market of relevance to trade in the Caribbean-Central American-South American area. Other critical components of the Petrojam ex-refinery or wholesale price include logistics costs and Government of Jamaica taxes, which vary with the price of oil.
The US Energy Information Administration data show that low USGC prices were briefly in play as of March 2020 at US$0.42 per gallon, but since then there has been a steep climb to US$4.15 per gallon amid war in Europe launched by large energy supplier Russia.
Based on the latest USGC price per gallon, and Bank of Jamaica’s opening selling rate for the US dollar on Friday, the finished petroleum product price translates to nearly $640 per gallon or $169 per litre. A mix of government duties and mark-ups from dealers and marketing companies is what has put the price at the pump above $300 for regular gas in some cases.
The pump is where consumers experience the pain of energy supply disruptions and volatile oil prices as gas is refined from crude.
The owner of a Toyota Corolla carrying a gas tank with a capacity of 48 litres will pay around $11,000 to $15,000 to fill the tank, based on the snapshot prices that prevailed last week – solidifying the days of paying $7,000 for a full tank as a distant memory.
neville.graham@gleanerjm.com