Petrojam to spend US$15m on refinery upgrades, Vaz tells Sectoral Debate

Energy Minister Daryl Vaz says Jamaica cannot afford to delay preparing State-owned Petrojam for the country’s energy future, as he announced a major round of investment to modernise the refinery.

Speaking on Tuesday during his 2026/27 Sectoral Debate presentation in the House of Representatives, Vaz said Petrojam is putting roughly US$15 million (about $2.4 billion) into essential infrastructure works.

He said the programme will cover upgrades to electrical systems, expanded storage, new pipeline work and significant rehabilitation of furnaces to improve dependability and long-term output.

Vaz also listed specific jobs, including a new asphalt storage tank, pipeline installations at Berth 2 in Montego Bay, and the replacement and refurbishment of two critical furnaces.

“In addition, a scheduled 90-day refinery turnaround will deliver key upgrades aimed at improving efficiency, reducing unplanned outages, and enhancing fuel quality. At the same time, an independent technical assessment is underway to evaluate long-term upgrade options, ensuring the refinery remains competitive as regional refining capacity declines,” Vaz said.

The minister argued that Petrojam carries strategic importance beyond Jamaica, noting it is the only petroleum refinery currently operating in the region and therefore matters to the wider Caribbean.

“Its geographic location and refining capability provide a unique opportunity to strengthen energy security while expanding regional influence,” he said.

Against the background of losses over the last three years, Vaz told Parliament that Petrojam’s forecast for the 2026/27 financial year is sales of 12.21 million barrels, with 7.2 million barrels meant for local supply and 4.9 million barrels set aside for export.

“This dual role ensures reliable local supply while generating valuable foreign exchange earnings,” he said.

Vaz also warned that Petrojam cannot keep absorbing the $4.50 cap on fuel increases, pointing to the continuing Middle East War as a key pressure on prices.

He said that from March 12 to April 8, 2026, transport fuel costs climbed by about $49.20 per litre, but consumers only saw $18 of that rise because of the Government’s cap.

“The remaining cost was absorbed by Petrojam to cushion households and businesses. That is a buffer of about US$8.6 million ($1.3–1.4 billion) worth of protection that this Government has provided for Jamaicans during this energy crisis.

“So when the Opposition Leader [Mark Golding] rises, and tells the Jamaican people that gas is cheaper than water, I would urge him to be reminded that 63 per cent of that cost is not being passed on to the consumer,” Vaz said.

He said the cushion has helped, but maintaining it is expensive, with costs projected to reach $11.8 billion by June 2026 if it continues unchanged.

“As a result, the Government is introducing a revised tiered pricing system to better reflect global market changes while managing price volatility,” he told the House.

Looking further ahead, Vaz said the Government is examining ways to get more value from Petrojam through partnerships, diversification and possible public-private arrangements.

He said this work includes assessing cleaner fuel pathways such as LNG (liquefied natural gas), bringing more renewables into operations, and tying plans to climate and sustainability targets.

“In essence, Petrojam is not just a refinery, it is a strategic national asset that must be leveraged wisely to support energy security, economic resilience, and Jamaica’s long-term development,” Vaz said.

The entrance to the State-owned Petrojam refinery is in the Corporate Area.