Petrojam headed for public-private partnership
There is consensus for scandal-riddled State oil refinery Petrojam to become a public-private partnership, Minister of Science, Energy and Technology Daryl Vaz told the House of Representatives yesterday.
Vaz, who was speaking in the annual sectoral debate, said that public consultations conducted by the Caribbean Policy Research Institute regarding the strategic direction for the refinery involved representatives from four groups — engineers, entrepreneurs, investment/finance professionals, and ordinary citizens — who were deemed to be without material interest in Petrojam.
“The public perspectives revealed the strategic importance of Petrojam’s assets to the country. However, there was the consensus for the establishment of a public-private partnership, in terms of the preferred strategic direction of Petrojam’s operations,” he said.
Vaz also noted that the major findings were linked to public dissatisfaction regarding Petrojam’s brand image, leadership and governance structure, operational practices, and high fuel costs, as well as the absence of private sector involvement, and misalignment between global and local oil prices blamed on Petrojam.
He said that the refinery has been mandated to take the required steps to address these issues that have been adversely impacting its image.
“Petrojam is procuring the services of a communications specialist, but I have instructed that a critical function of that engagement must include addressing what the public views as a lack of transparency in the pricing mechanism used by Petrojam to determine fuel prices, and providing ongoing explanation to the public on the process that is involved,” he said.
“Jamaicans deserve to know and to understand the formula that is used in calculating fuel prices, which fluctuate based on world oil prices. From the ministry’s side, we are getting technical assistance from the International Monetary Fund (IMF), which has access to pricing mechanisms in many countries, to analyse the impact of changes to Petrojam’s pricing regime,” he stated.
Vaz assured the House that this support is expected within four to six weeks, and will allow the Government to intelligently weigh the merits of contestable policy advice, and to make informed decisions in the interest of economic and social agendas of the country.
“Petrojam has a critical role to play in keeping prices affordable and smoothing out the peaks and troughs, as the world market experiences significant volatility. The report of the IMF [International Monetary Fund] will be reviewed with Petrojam, and a fulsome presentation on pricing will be brought before Cabinet,” he said.
In 2019, Prime Minister Andrew Holness assured the nation that the public would have a say in how the Government moves ahead with Petrojam, in light of a report recommending the transfer of ownership of the refinery to the private sector as the only credible future for the refinery.
“I am always listening to what the public is saying, and stakeholder groups. We will gauge public opinion, engage the public in this conversation, and then we make a decision,” Holness had told a press conference at Jamaica House.
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