The government has had to step in to lend Petrojam $12-billion to pay for petroleum products on the world market, because of US President Donald Trump’s executive order banning transactions with Venezuela.
The revelation was made in Wednesday morning’s sitting of Parliament’s Public Administration and Appropriations Committee, PAAC.
The committee is examining the first supplementary estimates for this financial year.
In August, President Trump issued an executive order banning transactions by US persons with Venezuela.
Last month, Energy Minister Dr. Andrew Wheatley revealed in Parliament that the order was affecting Jamaica’s joint venture and other business arrangements with Venezuela.
Most notably, Petrojam, which is 49-percent owned by Petroleos de Venezuela, PDVSA.
Not only is the Government of Jamaica unable to make payments to Venezuela for oil products, it’s now being revealed that Petrojam can’t even buy from other countries because of its part-Venezuelan ownership.
Noting a $12.6-billion loan from the government to Petrojam in the supplementary budget tabled yesterday, PAAC Chairman, Dr. Wykeham McNeill, asked for more information.
Acting Deputy Financial Secretary at the Finance Ministry’s Public Enterprises Division, Carlene O’Connor, explained that Petrojam has had to use cash resources to buy petroleum on the spot market, as a result of the executive order.
But Opposition Spokesman on Energy, Phillip Paulwell, questioned why the executive order applies to Petrojam, even though Petrojam isn’t currently purchasing from Venezuela.
Mr. Paulwell says the development is a severe blow to Jamaica.