Petrojam takes US$3.6 million hit after April gasolene unit breakdown

Petrojam, Jamaica's sole oil refinery, was forced to halt gasolene production in April when a key unit failed without warning, costing the company an estimated US$3.6 million (J$550 million) over 23 days of downtime and prompting an emergency contract to get operations back on track.

"Losses from the inability to produce gasolene are estimated conservatively to be US$156,000 per day of downtime," the state-owned operator said in a contract award notice reviewed by the Financial Gleaner. "As such, it is urgent that the repair activities are completed as soon as possible to minimise this loss."

Contract papers show the reformer catalyst — a vital part of the system that turns crude oil into marketable fuel — was fully deactivated on April 3. With gasolene output cut off, Petrojam moved to emergency procurement and asked three firms to bid on the repair work: Array Industrial, TechCorr USA Management LLC, and GAR Engineering Company Limited.

Array Industrial won the contract as the lowest bidder and carried out catalyst replacement work between April 5 and 28, 2026. The 23-day outage, at Petrojam's own daily loss figure, points to total production losses of roughly US$3.6 million.

The Financial Gleaner could not establish whether the full refinery was taken offline or only the gasolene section.

In May, the company had pushed back against reports of a fuel shortage, insisting it continued to "maintain a steady, reliable supply of all fuels".

The breakdown arrived ahead of schedule. Work done in February was meant to keep the catalyst running until a planned major turnaround set for October 2026.

The April stoppage added to an already difficult stretch for the state-run refinery. Petrojam had forecast a net loss of US$9.63 million for the current fiscal year — still an improvement on the US$26.7 million loss posted a year before. It is pressing ahead with capital spending projected at US$15 million this year, chiefly infrastructure for a liquefied natural gas terminal.

A full technical and economic review of the refinery's operating options, commissioned from consultancy firm Muse, Stancil and Company in November 2025, is due to wrap up in the third quarter of fiscal year 2026-27.

The catalyst failure also landed during a spell of wild swings in global oil markets. US and Israeli military action against Iran, which started earlier this year, drove crude prices up and lifted Jamaican pump prices by roughly 30 per cent — from $149.69 per litre in February to $193.78 on July 2, with a high of $194.38 on May 21 — tightening the squeeze on consumers already wrestling with wider cost-of-living pressures.