John Myers Jr., Staff Reporter

Almost a year after a board of enquiry found that the pricing policy of Esso Standard Oil was flawed, there has been no action from the Government as to what action will be taken to prevent what appears to be an exploitation of gasolene retailers representing the company.

The board of enquiry, chaired by the head of the Victoria Mutual Building Society, Karl Wright, found that the pricing methodology employed by Esso "was inherently flawed, to the extent that it operated to Esso's financial benefit, exclusively in periods of rising world oil market and local fuel pump prices, while the opposite was true for the dealers participating in the strategy."

The enquiry team, in its report completed on May 26, 2006, a copy of which was obtained by The Gleaner, recommended that a new formula be developed which includes provisions for automatic adjustment to compensate for changes in various factors which affect the petroleum trade.

"Efforts should be made to establish a business model, designed specifically to support the survival of the low-volume service stations (with throughput under 50,000 gallons per month) ... ," the team recommended in the report to the Ministry of Labour which had ordered the enquiry amid a standoff between the dealers and the management of Esso last year.

Two-day disruption

The dealers became militant after complaining of the unfair pricing policies of the company, which they claimed were forcing them out of business. This resulted in a two-day disruption of petroleum sales at most Esso service stations across the island.

But Errol Edwards, president of the Jamaica Gasolene Retailers Association, told The Gleaner the Labour Ministry has since divorced itself from the issue and has now referred it to the Ministry of Industry, Technology, Energy and Commerce (MITEC). He said despite several meetings with Phillip Paulwell, the Minister of MITEC, there has been no indication that the Government will act on the recommendations of the board of enquiry.

Mr. Paulwell declined to comment when contacted by The Gleaner. He referred our queries to the Ministry of Labour.

The Minister of Labour, Derrick Kellier, told The Gleaner that since the enquiry was completed, both Esso and its dealers met and resolved whatever differences that existed.

He explained further that "Minister Dalley (who was the Labour Minister at the time of the dispute), had entered the furore to avoid a disruption in the whole petroleum arrangement."

But Mr. Kellier said the issue with "the pricing arrangement has to do with the Ministry of Industry and Commerce".

A spokesperson at Esso said she was unable to comment at this time as the managing director was off the island. She said the managing director would return next week.