The government has locked in a price of USD$66 per barrel for oil for the next 15 months.

Speaking with our news centre today the Senior Deputy Governor at the Bank of Jamaica, John Robinson, confirmed that the deal was completed earlier this month.

Mr. Robinson says the hedging is being done to protect the country from future increases in oil prices.

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Jamaica buys approximately 9-million barrels of crude a year.

The annual oil import bill was approximately 1-billion dollars between 2010 and 2014, when oil prices were above 1-hundred-dollars a barrel.

The international benchmark price for Brent crude oil on Tuesday was $63.50.

According to the respected British publication, the Financial Times, it’s rare for oil-consuming nations like Jamaica to hedge their oil exposure.

Typically, airlines or oil-producing countries like Mexico, through the state-owned oil company Pemex, would use derivatives to manage their price risk.

However, Mr. Robinson says Jamaica’s state-owned oil refinery PetroJam is playing an important role in the programme.

The Ministry of Finance, BOJ and the Development Bank of Jamaica are also involved.

The Financial Times says Citigroup, which is managing Jamaica’s hedge deal, is now pitching the strategy to other countries.

Its also reporting that Citigroup has approached major buyers such as India, which is on course to become the world’s third largest oil importer, as well as smaller countries like Senegal and Ethiopia.