September 2012

The Jamaica Gasolene Retailers Association (JGRA), says as of October 1, service stations will no longer accept Master or Visa credit cards for fuel sales.

However, it said traditional debit cards will be accepted.

In August, members of the association agreed to stop accepting credit cards as part of cost saving measures.

The JGRA has complained that the unacceptable processing fees charged by financial institutions are sometimes higher than profit margins.

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FOLLOWING THE revocation of an exploration licence, which was granted to Rainville Energy Corp, a subsidiary of Sagres Energy, to drill for oil, Energy Minister Phillip Paulwell has signalled that another company that was granted a licence could have it cancelled if they don’t begin drilling soon.

The Petroleum Corporation of Jamaica yesterday said the failure of Rainville to meet its financial obligations has resulted in the revocation.

Under the agreement, which dates back to 2006, Rainville should have secured the necessary funding for the second phase of the programme which began in May 2012.

Among other things, this phase involved the drilling of an exploratory well by November 2013.

Paulwell told

THE Petroleum Corporation of Jamaica (PCJ) has pulled oil exploration rights from Rainville Energy.

The Canadian outfit’s licence was revoked due to its failure to meet its financial obligations.

Kelly Tomblin, president of Jamaica Public Service Company. - Ian Allen / Photographer
Kelly Tomblin, president of Jamaica Public Service Company. – Ian Allen / Photographer

Power distributor Jamaica Public Service Company (JPS) remains committed to using liquefied natural gas (LNG) for its planned 360-megawatt power plant despite Government’s expected plan to scrap the supply of gas for the project, according to the utility’s boss.

The private sector can assume the role of supplying the gas, if allowed by Government, JPS Chief Executive Officer Kelly Tomblin said Tuesday.

The company will meet with Government this week to determine its next step.

“The private sector could secure LNG if Government permits it,” Tomblin told

EXIM Bank Jamaica has again cut lending rates on its renewable energy loans for investment in energy-efficient equipment.

The new rate on offer to small and medium enterprises in the productive sector is 8.5 per cent for Jamaican dollar loans, down from 9.75 per cent last September. The USD rate 5.75 per cent.

“We know that energy costs are high and this is adversely affecting the growth of our small and medium enterprises. Not only in them realising profit but in their ability to compete effectively in the international markets,” said Valerie Crawford, manager of trade financing and risk management at EXIM Bank in a bank-issued statement.

The energy loans are available to commercial and industrial users, energy service companies and manufacturers of energy efficiency equipment and devices.

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Worries about weaker economic growth dragged down oil prices Monday.

Oil has now fallen five of the last six trading days. It fell more than six per cent last week.

Benchmark crude fell 96 cents, or one per cent, to finish at US$91.93 a barrel on the New York Mercantile Exchange. Prices for other petroleum products dropped, too.

In London, Brent crude dropped US$1.61 at US$109.81 a barrel on the ICE Futures exchange.

Germany delivered the latest dose of gloomy economic news, with its index of business confidence falling for the fifth month in a row. Germany is an economic powerhouse, but 43 per cent of its exports go to its euro partners. And growth is stalling across the other 16 countries in the Eurozone.

Slower economies mean less demand for oil, pushing prices down.

Phil Flynn, a senior market analyst for Price Futures Group, said he’s surprised prices haven’t fallen further. He said one reason could be that commodity funds have not been bailing out of oil.

demand destruction

Still, oil prices have been under pressure from worries about Europe. The dollar has been stronger, which makes oil cheaper for holders of other currencies.

“You’re seeing demand destruction around the globe,” he said. “You’ve got Saudi Arabia saying they’re going to pump oil until the cows come home.” All of that drives down oil prices, he said.

Heating oil dropped 2.2 cents to US$3.0987 per gallon, wholesale gasolene decreased 2.49 cents to US$2.9176 per gallon and natural gas ended down 4.8 cents to US$2.837 per 1,000 cubic feet.

– AP

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Opposition Spokesman for Industry, Commerce and Energy, Gregory Mair says he’s seriously concerned with reports that the government has abandoned plans to introduce Liquefied Natural Gas.

In a statement today, Mr. Mair said Energy Minister, Phillip Paulwell needs to address the country forthwith on what he calls a disturbing development and state clearly the government

There’s a warning that Jamaica could suffer some fallout in the international investment community arising from the Government’s decision to change plans for the implementation of the multi-billion dollar liquefied natural gas, LNG project.

According to Opposition Spokesman on Energy, Gregory Mair, the country’s image will be tarnished in light of the fact that an international company had been selected for the project.

In July, Korean conglomerate Samsung Corporation was declared the preferred bidder for the development and operation of

It is high time the Simpson Miller administration end the pussyfooting and come clean on the liquefied natural gas (LNG) project. For its policy-by-dribble is both confusing and confidence-draining and risks doing grave damage to the Jamaican economy.

First, let us place things into perspective. It is our view that alongside credible fiscal policies – which, hopefully, are being sorted out in current negotiations with the International Monetary Fund (IMF) – energy is the potential economic game-changer for Jamaica.

With the domestic price of electricity at upwards of US$0.41 per kilowatt-hour, Jamaican firms are difficultly placed to effectively compete with hemispheric and global manufacturers and service providers. Indeed, the higher price of energy has been a significant contributor to this country’s long period of anaemic advance in GDP.

A substantial part of our problem, of course, is that the bulk of our electricity is generated by old, inefficient power plants that burn expensive oil. Changing the fuel mix, therefore, is a critical component towards reducing the cost of domestic energy.

Settled on natural gas

For more than a decade, Jamaican administrations have deliberated on the issue and appeared, in the end, to settle on natural gas as the fuel of choice.

It is largely against this backdrop that the former Jamaica Labour Party administration, after a badly compromised initial tender process that it was forced to overturn, called for new bids for an LNG storage and regasification facility to begin to give effect to the fuel-conversion programme. Months ago, it was announced that Samsung was the preferred bidder for that facility.

Previously, the Jamaica Public Service Company, an electricity generator and monopoly distributor of power, won the bid to establish a natural gas-burning, 480-megawatt power plant. The expectation was that with natural gas and enhanced efficiency, this facility would drive down the cost of power by a third – not sufficient, but a start.

This newspaper has always felt, and argued, that coal, and other fuels, ought to be part of the energy mix. Our primary concern is for the delivery of the cheapest power to afford the economy a fighting chance at competitiveness. At the same time, we want to be assured of a predictability of supply, starting with the fuel.

Project could be sidelined

Unfortunately, the Government‘s poor communications strategy is injecting grave uncertainty and potential partisan rancour into the discourse.

Dr Carlton Davis, the highly respected public servant who heads the Government’s energy task force, had hinted that the LNG project could be sidelined if the Samsung bid did not meet specific price points for the delivery of electricity. It has for weeks been leaking out that those price points, whatever they were, have not been met and that LNG might be abandoned.

What, precisely, this means remains unclear. We would, for instance, wish to be told frankly whether Jamaica can find no supplier of LNG – the price of which has risen on the back of demand in Asia despite the collapse of the price of natural gas in North America – at a cost that makes sense. Or whether it is other elements of the pricing of the project that don’t compute, and which party they relate to. Or, perhaps there is another approach to the project, including a mix with other fuels.

Uncertainty, ultimately, breeds apathy.

The opinions on this page, except for the above, do not necessarily reflect the views of The Gleaner. To respond to a Gleaner editorial, email us: editor@gleanerjm.com or fax: 922-6223. Responses should be no longer than 400 words. Not all responses will be published.

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