'US$2b spent on oil imports'

Pickersgill

JAMAICA SPENT US$2 billion ($84 billion) on oil imports from 1995 to 1999, says Robert Pickersgill, Minister of Mining and Energy.

Mr. Pickersgill was speaking in the Sectoral Debate in the House of Representatives on Wednesday, and he gave the following figures for the five-year period:

In 1995, 21.2 million barrels, at a cost of US$392.4 million at an average of US$18.50 per barrel for both crude oil and products.

In 1996, the import bill was US$459.5 million for 20.9 barrels, an average of US$22 per barrel.

In 1997, 22.5 million barrels were imported at a cost of US$444.1 million.

In 1998, 22.8 barrels were imported at a cost of US$322.9 million.

And in 1999, the import bill was US$431.1 million for a record volume of 23.2 million barrels at US$18.58 per barrel.

Mr. Pickersgill said that in 1998, oil prices decreased by an average of 27 per cent, there was only 1 per cent increase in consumption. In 1999, when average prices went up 33 per cent, there was no decrease in consumption but instead, an increase of 400,000 barrels or 1.8 per cent consumed.

"This means that consumers might be paying no attention to conservation, but continue to use up the same quantities regardless of the price. We must do better than," the Minister warned.

He said that over the last two years, the average cost of oil to the country was just about US$18 per barrel. However, because of the spread of the price variation, there has not been a significant impact on inflation. The government adopted several strategies which cushioned the potential inflationary impact of the price increases.

These, he said, included arrangements under the San Jose Accord, the forgoing of over $300 million in ad valorem taxes and through the absorption by Petrojam, from time to time, of some of the increased import costs.

However, Mr. Pickersgill said he was not satisfied that the contribution from Petrojam had always benefited the consumer to the extent that it should.

Mr. Pickersgill said his Ministry was in the final stages of updating five pieces of legislation affecting the sector.

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