Errol Edwards, president of the Jamaica Gasolene Retailers Association of Jamaica.
Gasolene retailers are reporting a 10 per cent fall-off in sales volumes at the pumps and expect the situation to worsen in the height of summer when schools are out and traffic volumes decline.
Errol Edwards, president of the Jamaica Gasolene Retailers Association (JGRA) says that a bad year for dealers will get worse when schools close for the holidays.
Record highs
Petrol is at record highs, and expected to climb higher - tracking world oil prices whose volatility has pushed prices above US$135 per gallon this month.
On Thursday, the state refinery Petrojam announced another increase in the fuel it wholesales to marketing companies: regular 87 octane sold for $73.76 per litre, up $2.89; premium 90 octane for $75.20, also up $2.89; while diesel wholesaled for $78.63 per litre, increasing by $2.96.
Dealers add their respective margins to the ex-refinery prices.
Pump prices are now well above $80 per litre and in some cases are nudging $90.
"The recent checks that we have done show that there is a 10 per cent fall in volume," Edwards told the Financial Gleaner.
"It is more related to spiraling prices in recent months and that I think could be attributed to the slow demand."
The fallout is not so much in the number of motorists buying gas, but that drivers are not increasing the amount they spend and are simply taking less gas when they visit the pump.
Additionally, car buyers are choosing smaller vehicles with higher gas mileage and staying away from gas guzzlers.
He expects the trend of weak sales to continue even beyond the summer, given predictions that oil will hit US$150 and could rise as high as US$200 this year.
Slow period
The out-of-school season, however, remains the retailers' chief worry, since it is seasonally a slow period.
"Parents don't have to do as much driving to do the drop-offs and the pickups," Edwards said "they just drive to and from work."
To keep revenues up, Edwards suggests that dealers would have to look to internal efficiencies, such as better management of credit collections.
"We need in some cases to discontinue bad creditors and reduce the time period for collection," Edwards said.
richard.deane@gleanerjm.com
