By McPherse Thompson, Assistant Financial News EditorTHE PRICES of unleaded gasolene and automotive diesel oil have been increased by an average of 49 per cent in the 13 months between January 2002 and yesterday, according to data supplied by Petrojam, the island's oil refinery, and the Jamaica Gasolene Retailers Association (JGRA).
The ex-refinery price of unleaded 90 octane supplied by Petrojam to the local distributive trade went up by 44.9 per cent, from $17.18 to $24.90; unleaded 87 octane increased by 46.7 per cent, from $16.02 to $23.50, and automotive diesel oil has been increased by 55.6 per cent over the period, moving from $14.75 to $22.96.The corresponding increase in prices at the pumps varied. However, according to Lloyd G. Brown, president of the JGRA, the movement reflected at one of the lowest charging petroleum service stations in the Corporate Area of Kingston and St. Andrew in the 12 months between January 2002 and January 2003, saw the 90 octane moving from $20.53 to $26.59, a 29.5 per cent increase; 87 octane increasing by 30.3 per cent, from $18.92 to $24.65, and diesel oil up 36.3 per cent, from $17.23 to $23.49.
Gasolene prices continued to rise yesterday as Petrojam increased its prices based on conditions in the international oil market. Winston Watson, managing director of Petrojam, said the latest increases were based on three significant factors, including the demand by oil-producing Venezuela for oil instead of itself supplying as has been the norm. The increases were also influenced by tensions and the threat of war between the United States and Iraq, as well as a severe winter in the United States, which has pushed up the demand for oil. In the past few months, increases in gasolene have also been attributed to movements in the Jamaican dollar against the United States currency, as well as other conditions in the international market.
The exchange rate used by Petrojam as part of its pricing mechanism at the start of its 2002/2003 fiscal year in March 2002, was around $47.68, but by the second week in January 2003, it has moved to $53.01.
Mr. Brown said the same extent of increases in prices quoted by Petrojam have been passed on to consumers.
However, the increased prices of gasolene have not only negatively impacted the motoring public, but the retailers themselves, the JGRA president said. "A lot of us are operating on overdraft, we have to fork out more money and we are operating at the same margins," he said.
"Utility bills are increasing, security costs have increased leaps and bounds, and we are faced with higher wage bills because attendants are asking for 40 per cent increase in the first year and 30 per cent in the second year, in addition to everything else," he said.
According to Mr. Brown, "we have to be careful because we have a high level of unemployment," but with the huge increases being demanded by gasolene service station attendants, "we may have to resort to self-serve if the wage bill keeps increasing."
Mr. Brown said overhead costs such as those were becoming increasingly burdensome to gasolene retailers because they have been operating on a fixed margin based on the pricing structure of the petroleum marketing companies.
It is against that background that the JGRA has called an emergency meeting of retailers for next Wednesday, February 26, "to discuss critical issues affecting gasolene retailers at this time."
Mr. Brown said the meeting will deal with issues such as legislation, for which they have been lobbying for more than 10 year, to stop multinational marketing companies from operating service stations in direct competition with its local dealers. They also want the legislation to address and place restrictions on the amount by which the marketing companies could raise the rent it charges its tenants, as well as force the companies to offer longer contracts of tenure to their tenants.
In addition, they want the marketing companies to address the issue of goodwill payments by an incoming dealer to an outgoing dealer.
