Gov’t Expects to Recoup Petrojam Losses From Rising Global Oil Prices – Min. Vaz

Minister of Energy, Transport and Telecommunications, Hon. Daryl Vaz, says the Government is expected to recover losses incurred by State refinery, Petrojam, as a result of rising global oil prices.

“Subsidies were incurred due to significant absorption by Petrojam of sharp increases in global oil prices caused by the conflict in the Middle East. It is expected that the accumulated subsidies for the current financial year will be recovered over time through the pricing mechanism as global market prices normalise,” Mr. Vaz said.

He was responding to questions posed by Member of Parliament for Kingston Eastern and Port Royal, Phillip Paulwell, during Tuesday’s (July 14) sitting of the House of Representatives.

Mr. Vaz also responded to a question from Opposition Leader, Mark Golding, regarding whether the Government would continue subsidising fuel prices for consumers and motorists if global oil prices remain elevated or continue to rise.

“You will recall that we did announce a change to the pricing formula recently… the situation is fluid. The bottom line is, I can’t sit here and tell you what’s going to happen next week… I don’t even know what’s going to happen tomorrow in relation to the geopolitical situation in the world,” the Minister stated.

“What I can say is that, whereas we want to recover, obviously, over time, we have our duty and our responsibility to protect the consumers because oil affects everything else. But there is a flip side to it, [which is] while we have the ability to adjust our pricing mechanism, which we have done already, and there are different scales, we hope that we don’t have to go to the highest scale because, obviously, that will be disastrous in terms of the effect on inflation and everything else,” he added.

Mr. Vaz further noted that “with what has happened in Venezuela recently and what’s happening in Guyana and right around us… there are many discussions that are taking place right now with a view of the possibility of getting oil much cheaper than we are buying right now in other jurisdictions”.

“That gives us a great opportunity. But, again, we have to be careful… it’s a work in progress. But we are not unmindful of the fact that there are opportunities out of adversity. We look forward to taking [those], because if we do that, then, obviously, we’ll be able to stabilise and get rid of the losses in a shorter period of time,” he stated.