Gov’t contemplates ‘COVID’ style measures amid rising oil prices — Vaz

We [the Government] will do what we can do, but it is important that you do what you need to do to understand that you need to conserve starting today, today, today, the minister stressed.He noted that the Government will likely explore policies to limit movement, specifically transportation, and suggested the possibility of returning to a COVID-hybrid version of working from home to reduce fuel consumption.But he emphasised that the Cabinet will ultimately decide on what final plans will be announced to conserve energy.The Government is gonna have to look at policies to limit movements, especially transportation movements. I don't know... whether or not we go back to a COVID-hybrid version of working from home; something has to happen, because the level of traffic that I am seeing on the road doesn't show me that anybody realises that there's a war and the price of fuel/oil is going to go up, and up, and up, Vaz said.He added, I am sure that Cabinet will deliberate, the Government will come up with plans as to how to conserve [energy], but it is 100 per cent the responsibility of every Jamaican to realise that we are in a major, major crisis as it relates to the price of oil internationally, and therefore, you need to take responsibility for your household, your business, [so] see what you can do.At the same time, Vaz said that despite the market volatility, Jamaica's energy security remains intact due to established finished product supply contracts and the local refining capacity at Petrojam.So, it's not a matter of not being able to buy [oil]; it's the price. So there's no need to panic, he declared.Earlier, the minister advised that the Government — through Petrojam, the Energy Ministry and the Finance Ministry — has taken deliberate steps to, among other things, mitigate the full pass-through of global price increases, and protect consumers from sudden and sharp fuel increases.Additionally, Petrojam's pricing committee continues to monitor market conditions and adjust ex-refinery prices accordingly.However, Vaz pointed out that while the current mechanism has been effective in cushioning customers, it has resulted in significant financial losses by Petrojam, which is between 1.3 billion and 1.4 billion. That loss was not passed on to Jamaicans.If we continue the current pricing mechanism up to June 2026, it would cost the Government of Jamaica 11.8 billion, which is unaffordable, and unsustainable and, is, in fact, two-thirds of this budget year's revenue measures, Vaz informed.Pointing to the breakdown in talks between Iran and the United States, Vaz said he was hopeful that there would be a resolution, noting that the discussions appear to be going in the wrong direction since Monday.In response to the high oil prices globally, Vaz said Cabinet has considered a revised new tiered pricing mechanism, designed to allow for controlled and predictable adjustments, maintain consumer protection for smaller increases and enable greater flexibility during larger global price shocks.As of Wednesday, he said the new pricing mechanism to be used by Petrojam to respond to the fuel uncertainty will entail a tiered approach, which will see petroleum prices being more closely aligned to global price movements.This will allow Petrojam to be more agile and respond in a more timely manner to price volatility. What does that mean? It means that the 4.50 cap [on fuel] cannot be sustained, and it means that we'll have to have several different tiers of caps — probably three — that will speak to what's happening in the market and, as I said, pricing is weekly. So it means that we can adjust on a weekly basis, Vaz explained.But let me be blatantly and truthfully upfront in your face; the Government of Jamaica cannot stomach an 11.8 billion [loss] with all of what we have to do and all of the contending priorities, and anybody who tell you any [thing] different... rubbish! No Government in a situation like this can sustain that, the minister argued.