Minister of State in the Ministry of Science, Technology, Energy and Mining, Julian Robinson is set to leave the island today, to take part in a renewable energy Summit in the Republic of Malta.
He will be Jamaica
A lockdown of the local petroleum sector is looming as furious industry stakeholders intensify calls for Energy Minister Phillip Paulwell to intervene and plug gaping holes which they say are making their survival increasingly difficult.
The peeved stakeholders include petroleum tanker drivers, haulage contractors and service station operators, all of whom point fingers at petroleum marketing companies, which they claim are walking away with huge profits while the rest of the sector struggles as a result of policies they have imposed.
It is against this background that the stakeholders are joining forces to lobby the Government to introduce legislation which they feel will create a level playing field.
Their concerns have heightened in the wake of recent moves by one marketing company to terminate the contracts of several service stations which reportedly failed to meet performance targets it had set.
The threats of closure sent shockwaves through the petroleum retail sector and resulted in several meetings involving the Jamaica Gasolene Retailers Association (JGRA). Out of those discussions came plans to implement a wide range of cost-cutting measures in order for them to remain afloat. The termination of the jobs of scores of pump attendants and other workers was among them.
It is a last resort for JGRA President Trevor Heaven, but he said it will be inevitable if the Government fails to address serious anomalies relating to the policies of the marketing companies.
“We don’t want to raise prices; in fact, we can’t. And we don’t want to dislocate our employees, but we need equitable margins to take into account factors such as shrinkage (evaporation of a portion of the product),” he told the Jamaica Observer.
Shrinkage, according to one industry expert, normally occurs in the transportation of fuel from one location to another, or in the process of filling up at service stations.
Another issue with which the sector grapples, added Heaven, was that service station operators who lease properties from marketing companies, and who seek to diversify their income, are faced with strong resistance.
“The marketers should allow retailers to use the facilities to explore other income-generating activities. The moment you decide to go into a tyre sale venture or any other service on the property, you are told how much you will need to pay,” Heaven said, describing the lease agreements as onerous.
“We have never seen this level of fallout before, and it speaks to the fact that the business itself is becoming more and more challenging,” said Heaven, who told the Observer that he would be meeting with other aggrieved stakeholders before approaching the energy minister.
For Corporate Area service station operator Dwight Moore, the blame lays at the feet of successive political administrations which have failed to nip the problem in the bud by introducing legislation to level the playing field.
“We want a win-win situation, because we understand that they (the marketing companies) made an investment when they decided to come to Jamaica, and we fully appreciate the need for them to capitalise on that investment. However, the existing legislation favours them, as they are able to set margins without sharing any of their benefits with service station operators. We get the product at near commercial rates and then have to resell, despite us bearing the brunt of costs associated with product shrinkage, security, etc. These costs erode what you make on the product. What we need is equity,” Moore declared.
Despite several efforts, the Observer was unable to speak with representatives of two of the major marketing companies operating in the country.
Energy Minister Paulwell was also unavailable as he was said to be off the island. However, a senior official of the Ministry of Science, Technology, Energy, and Mining acknowledged that the ministry was aware of the charges against the marketing companies.
According to the officer, a comprehensive review of the local petroleum retail sector has been completed, and will lead to a raft of changes relating to issues such as safety, transparency and competitiveness.
The technocrat explained that the measures will also result in the creation of a level playing field for all the stakeholders, including haulage contractors, tanker drivers and the petroleum marketing companies. The Observer was also told that the proposed measures, some of which are likely to be legislated, are in keeping with the overall thrust to modernise the local petroleum sector.
Read more:
KINGSTON, Jamaica – Opposition Spokesman for Industry, Commerce and Energy, Gregory Mair, is blasting Government’s handling of the energy sector.
In a release to the media Mair said inaction on 10 consecutive weeks of increasing gas prices, high electricity rates and Petrojam
KINGSTON, Jamaica – Minister of State in the Ministry of Science, Technology, Energy and Mining (STEM), Julian Robinson, says Jamaica is ripe for investment in renewable energy.
Following a recent assessment of the rates paid to people who generate energy which is then sold to the grid, a recommendation is now on the table that will make it more attractive for investors to invest locally, said Robinson said, adding this will bring significant benefits to the energy consuming public.
Since the start of 2012, the Jamaica Public Service Company (JPS) has lost more than US$30 million as a result of electricity theft. This, as the company continues to absorb the cost of the fuel used to produce much of the electricity that is illegally abstracted.
“About 14 per cent of the electricity produced by JPS is stolen, and the cost of this theft is shared by both JPS and our customers,” says Kelly Tomblin, JPS president and CEO. “In addition to the financial losses associated with electricity theft, JPS is spending another US$30 million each year on efforts to curtail the problem. Despite this investment and the dedication of more than 200 employees to fighting losses, the problem persists,” she said.
JPS has utilised a number of strategies in its fight against electricity theft. These include the installation of anti-theft systems in communities with high levels of losses, account audits, investigations, removal of illegal lines, and supporting the police. Since the start of the year, 38 persons have been arrested for illegal abstraction of electricity, more than 5,700 meter irregularities have been discovered, and 14,000 illegal ‘throw-up’ lines removed across the island.
“We continue to explore additional ways of dealing with this problem, as persons are getting more and more innovative in their illegal use of electricity. JPS needs the support of everyone – the Government, customers, the police, and community leaders to address this problem because it affects every sector of society,” the JPS CEO explained.
In the wake of concerns about the rising cost of petrol, Petrojam, the oil refinery jointly owned by the Jamaican government and
Chad Bryan, Gleaner Writer As the current exchange between the Petroleum Corporation of Jamaica (Petrojam) and the Micro, Small and Medium-Sized Enterprise (MSME) Alliance continues, fuel prices keep going up. The MSME is the latest organisation to complain publicly about high gas prices. MSME member and Jamaica Solar Energy Association President Roger Chang, is asking that Petrojam make its pricing mechanism public. Rising gas prices are a consistent feature of Jamaica, in the past punctuated by riots as government taxes caused a sudden spike, which aroused public ire. One of those riots was in January 1979 when, under the Michael Manley-led People’s National Party (PNP) government, fuel prices increased from $3 to $3.20 a gallon for premium gasolene and from $2.85 to $ 3.10 a gallon for regular. In January 1985, yet another year started with increased fuel prices ande riots, this time under the Edward Seaga-led Jamaica Labour Party (JLP) government. Five people were killed in the violence that ensued after a $1.91 increase, prices moving from $8.99 a gallon to $10.90 a gallon for premium gasolene. In April 1999, with the PNP back in control under the leadership of PJ Patterson, demonstrators took to the streets to protest a hike in fuel tax from $1.55 a gallon to $2. On Friday, Petrojam’s website listed E10 (87) gasolene at $107.5228 and E10 (90) at $109.1787, prices to which dealers would add their margins. The increase in fuel prices is an all too common occurrence which motorists continue to grapple with at the pumps as, since recently, the cost of fuel went up by $2.00 to cost $107.52 for a litre of E-10 87, $109.17 for E-10 90 gasolene and automotive diesel, which has gone up by $1.11 to sell for $ 107.29 per litre. The earliest figures on the website were $27.4276 for unleaded 87 grade fuel in February 2004, with unleaded 90 going for $28.8704 at that time. Cheap petrol price? According to It’s one of the costliest crimes plaguing Jamaica, but few people recognise the scope and gravity of this parasitic add-on. The Jamaica Public Service Company (JPS), the monopoly distributor of electricity across the island, lamented this past weekend that it has lost US$30 million to electricity theft so far this year, and spends another US$30 million annually on technology to curb the piracy. Combined, that represents the equivalent of J$5.4 billion that inflates the cost of power to Jamaican households and businesses teetering on the edge of survival. “About 14 per cent of the electricity produced by JPS is stolen, and the cost of this theft is shared by both JPS and our customers,” says Kelly Tomblin, JPS’s president and CEO. Of course, that’s not the whole story. Jamaica’s electricity costs are meteoric because of JPS’s outdated plants, which deliver energy inefficiently. Energy cost, as this newspaper has repeatedly emphasised in these columns, is the most crucial factor behind the uncompetitiveness of the Jamaican economy. This handicap puts Jamaica at a severe disadvantage internationally and against regional neighbours such as Trinidad and Tobago, on which misplaced rage has been directed for its one-sided trade relationship, on which Jamaica is running a deficit of nearly US$1 billion on mostly oil imports. Scores, if not hundreds, of businesses that have foundered name electricity cost to be among the main reasons, if not the primary one, for their collapse. Jamaica pays up to US$0.40 per kilowatt-hour for energy – JPS will be quick to remind that August’s rate was eight cents cheaper – six times that of Trinidad and Tobago. Phillip Paulwell, the energy minister, has been a vigorous cheerleader for the dismantling of the monopoly, which he believes will drive down costs to consumers. Mr Paulwell predicates his vision for a liberalised electricity sector on foreign investors indulging their appetite among a Jamaican population willing to give its hand to the suitor with the sweetest proposal. But Mr Paulwell’s romanticised notions seem to ignore the compelling reality that investors may not gamble money on Jamaica’s unreliable national security structure. LAW AND ORDER ON HOLIDAY? The maintenance of law and order is the fundamental role of government, the glue that holds society and the economy together. It is on that score that the Jamaican Government has been found wanting. JPS, which has decades-old roots in the Jamaican economy, may be less minded to disengage because of the breadth of its capital investment, even if it has to spend an extra US$30 million a year. A new company, however, may be less inclined to yawn at such write-offs for crime. Politicians of both the ruling People’s National Party and the opposition Jamaica Labour Party have generally winked at the problem of electricity theft. Most inner-city communities are cobwebbed with illegal connections. And unscrupulous business operators and wealthy suburban householders are big on the gig. The police do little to prevent it. The numbers bear the tale. According to JPS, “Since the start of the year, 38 persons have been arrested for illegal abstraction of electricity, over 5,700 meter irregularities have been discovered, and 14,000 illegal ‘throw-up’ lines removed across the island.” But that’s a drop in the bucket. Government had better get serious about electricity theft. Or its overtures to investors might be equated with wooing a lover without the vow of protection. 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. http://jamaica-gleaner.com/gleaner/20120903/cleisure/cleisure1.html It was National Hero Norman Washington Manley who said that the mission of his generation was to achieve political independence. He further said that the mission of the next generation would be to achieve economic independence. But economic independence is clearly a harder task to achieve than political independence. And a main ingredient in the achievement of economic independence is in having independence in electricity. In the days before the world oil crisis which began in December 1973, independence in electricity was not an issue as oil was cheap. But since that time there has been talk of having alternative sources of energy because of increasingly higher prices. The oil-producing countries then played their underselling game and Jamaica dropped its plans of creating alternative energy because of temporarily cheaper oil prices that sky-rocketed to very higher prices once the alternative energy plans were dropped. In the 1990s the government of the day decided that our light and power company, the Jamaica Public Service, would be best divested to private people. Government could not manage JPS in such a way that there were not constant power cuts caused by breakdowns of the generators. But private owners are only interested in profit, which is one reason for higher prices. Another reason is the rising prices caused by the US Gulf War. From the 1990s the JPS has been using a certain amount of windmill energy. Then came 9/11 in 2001. The United States of America needed alternative sources of energy to fight their war in the Middle East as the oil available was not enough. In any case, the available oil was being used by both sides of the war to fuel war planes and whatever else. As a result of all this, oil supplies dwindled and as a consequence oil prices went up. This has brought to the fore once again the argument for greater use of alternative energy, and more important its actual implementation to some extent. It is true that we may be stuck with JPS for many more years as suggested by the headline of Mark Wignall’s column on August 16. But it does appear that despite all the obstacles listed in Wignall’s column, independence in electricity is slowly but surely coming. Already it is being done by using solar, windmill or a combination of both without going through the red tape, trauma and rigmarole and whatever other delays of attempting to share the grid with JPS. Indeed, solar panels on roofs of houses are becoming very common. Is it the JPS that has gone into solar energy with the street lights on the Highway leading into Portmore, St Catherine, or is it the foreign contractors? Incidentally, JPS also has some hydro-electric power plants and has always had them. My interest in solar, hydro and windmill is partly out of concern for our political and economic independence and partly subjective. I am an asthmatic and am affected by the smoke from oil generators and also from coal energy – which is being marketed as safe for health due to improved technology, but I am not convinced. I am not really in favour of any source of energy that requires burning for its effectiveness. And I am aware that in Jamaica, just about everyone has a relative who is asthmatic if they do not themselves suffer from the condition. In other words, “is nuff a wi”. That aside, both coal and Liquid Natural Gas would be imported, if we went that route. So imported cheap coal as well as cheap LNG would lead to a similar dependence on outside supplies leading to the spending of precious foreign exchange. I believe that coal and LNG are now cheap because the owners of such commodities are attracting buyers. But both might become expensive if we are put in a position where we cannot do without it because we have nothing else. Indeed, I believe that it is the age-old game of undersell, put the competitor out of business and then jack up the price afterwards. But to politicians, cheaper electricity translates into more votes at election time. Energy minister Phillip Paulwell promotes cheaper energy, even if it is more hazardous and even if it encourages dependency. But has anyone in the People’s National Party guessed that by the time election comes around the cheap coal and cheap LNG may skyrocket to the point where the voters swing away from the PNP? Or is there a plan by Prime Minister Portia Simpson Miller to call a snap election the minute the electricity prices fall? Our aim should be to avoid any form of energy that increases dependency and detrimental to health. We should instead be looking towards complete independence in electricity, even if the capital outlay in its initial years is costly, especially with regard to solar energy. And with all the hurdles listed by Mark Wignall, the quicker we move on this the better. To our credit, we have started already. ekrubm765@yahoo.com Read more: TREVOR Heaven, president of the Jamaica Gasolene Retailers’ Association (JGRA), has said that service stations will be revamping their operations in a bid to save the sector from extinction. “We are facing an unprecedented financial challenge,” he told Auto. “At this point, there are four stations in the Corporate Area that are already closed. These are the Total service stations in Harbour View, Half-Way-Tree, shortwood, and Red Hills.” “I intend to seek audience with the management of the French-owned Total Jamaica to see how we can best resolve the issue,” he said. When contacted, Paula Duncan, HR manager for Total Jamaica, said she could not comment as the company’s managing director, Dr Michael Faulkner, was off the island. However, the JGRA president said he has been advised that another two service stations in St Catherine and one in Manchester were on the verge of closure, but refused to name the brands. Heaven, who met with retailers at the JGRA’s Constant Spring Road headquarters on Wednesday, attributed the current downturn in the gasolene retail business to high operational costs, shrinkage due to temperature changes, reduced gross income (low margins and reduced throughput) and increased bank and credit card charges. The JGRA president said a raft of new measures would have to be implemented. “We’ll be moving away from full service to self service. We’ll will have discussions with the unions to see how best we can transition,” he said. “While we [the dealers] develop other income streams, we can divert our employees into other areas of activities rather than dislocate them.” Heaven said dealers would discontinue accepting Master Cards and Visa Cards at service stations as the bank charges are sometimes greater than the profits made. “Only the NCB Key Card and debit cards will be accepted,” he said. Heaven said he would also be seeking a meeting with Dr Peter Phillips, minister of finance, planning and the public service, as well as Anthony Hylton, minister of industry, investment and commerce, regarding an amendment to the Weights and Measurement Regulation. The JGRA comprises 160 members and celebrated its 61st anniversary in April, 2012. Read more:
HEAVEN… four stations in the Corporate Area are now closed
