Co-chairman of the Economic Programme Oversight Committee, EPOC, Richard Byles, says the full benefit of reduced oil prices should be passed on to Jamaican consumers.
Despite a 41-percent decline in the price of oil on the international market since the start of September, the country’s oil refinery, PETROJAM, has only reduced its prices by an average 19-percent.
This has raised concerns that the full benefits of the falling oil prices are not being passed on to local consumers.
There are fears the country will not realise the economic benefits of the oil price decline.
Petrojam’s ex-refinery price for 87 and 90 octane gasoline along with diesel oil, fell from an average of $125.47 at the start of September to $102.13 last week Wednesday.
That represents a decline of $23.34, or just under 19%.
But over that same period the price of oil on the international market fell from almost 94-US dollars per barrel to less than USD$56 per barrel in trading today.
That’s a 41% decline.
The co-Chairman of EPOC, Richard Byles, has been insisting that consumers get the full benefit of reductions in the price of oil.
Mr. Byles says passing on the full reductions can boost the spending power of working class Jamaicans and help generate economic growth.
Last week Opposition Spokesman on Finance, Audley Shaw also raised concern in parliament that the fall in oil prices has not been passed on to consumers as quickly as increases would have been.
Mr. Shaw also noted that based on the decline in oil prices so far this year, there should have been a 20 percent decrease in electricity bills.
However he says there’s only been a 10 percent reduction in the cost of the utility.
He’s questioning whether Petrojam is passing on the full reductions to the Jamaica Public Service Company, JPS.
Mr. Shaw also asked whether the slow pace at which reductions are passed on to consumers, is due to the government’s desire to accumulate windfall profits, which will then be transferred to the Consolidated Fund.
According to the Opposition Spokesman, in other countries, such as the United States, there has been only a 3-percent lag in the passing on of reductions in oil prices at any given time.