PCJ says mechanism to set petrol prices is "above board"

The Petroleum Corporation of  Jamaica (PCJ) is declaring that the mechanism used to set petrol prices is above board.

This assertion came at a forum held on Thursday  to respond to calls from various sectors to explain what contributes to the prices consumers end up paying at the pumps.

According to the PCJ, 61% represents the price of the finished product, while the government adds another 22.8% in a special consumption and ad valorem tax. The remaining 16.2% is the retailers' margin.    

“It would be a bit erroneous to expect Jamaican dollar fuel prices to follow the same percentage reduction in a US dollar price, in a US market,” said PCJ Chairman Christopher Cargill

According to  Cargill, Petrojam's ex-refinery price movement should be based on the US Gulf Coast Reference Prices and not based on West Texas Intermediate.

He said the state owned oil refinery, Petrojam, has been losing money over the past two months, due to falling oil prices.

The Jamaican Government's policy is that changes on the international market should be reflected locally.

Mr. Cargill explained that this has implications for Petrojam's reserves.