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Former energy minister Clive Mullings
Former energy minister Clive Mullings believes Jamaica could end up spending money to take full ownership of an oil refinery that is not economically viable.
Speaking on TVJ's current affairs programme All Angles Wednesday evening, Mr. Mullings said the government should wait for the report and recommendations of the commission set up to review the operations of Petrojam.
"When you have like a JPS going the route of LNG...when you bare in mind as well that you find that they are importing this 50 per cent in terms of finished product. So at this point in time, it's operating almost like a terminal. Now refinery margins are very narrow and so, if you're not fully utilising your refinery, you're going to go into a loss position. When you factor all these things in, I believe the commission may very well show that it makes no sense to go forward," he contended.
According to Mr. Mullings, the process to upgrade the refinery will also be costly.
"The upgrade is going to cost at least US$1 billion. So, bearing in mind the amount of taxes we levy on fuel, to recover and recoup, to repay that loan of a billion dollars is also not making Petrojam a least cost option...and I am not convinced, quite frankly, that this is the best approach under the circumstances," he explained.
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