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Wednesday, February 27, 2008
Jamaica barely made enough hard currency from its export earnings to pay for its oil bill in 2006. But the country's gross level of inefficiency in converting a barrel of oil for its energy needs perhaps played a more important role in the government's decision to fast-track the legislation of a new energy policy.
Minister of Clive Mullings says his ministry is working assiduously to have Government''s Energy Policy promulgated into law by March 31.
Mullings told JIS News that consultations were held on the policy over the last four to six weeks after it was tabled in Parliament as a green paper.
"In those meetings and consultations, we took note of all the concerns and suggestions, distilled them, and that will come to inform the Energy Policy to move (it) from a Green Paper to a White Paper, and then have it promulgated into law," Mullings explained.
US$1.76 billion, or 93 per cent of Jamaica's export earnings, was spent by the government to import 30.8 million barrels of petroleum products in 2006. The bill was approximately US$2 billion in 2007.
Jamaica's overall fuel bill grew from US$648.1 million, or 21.6 per cent of total imports in 2000 to US$1.76 billion, or 34.7 per cent of total imports in 2006.
According to a special report by the Bank of Jamaica published in its quarterly monetary policy report for the three months to December 31, 2007, the most significant contributor to this increase was an annual average increase of 21.3 per cent in the price of crude oil over the period.
But the central bank noted that demand for fuel, in volume, also grew steadily at an annual average rate of 3.4 per cent between 2000 and 2006.
"This growth contributed approximately 30.0 per cent of the average annual increase of the national fuel bill over the period and also contributed to the deterioration in Jamaica's current account deficit to 11.4 per cent of GDP in 2006 from 4.7 per cent of GDP in 2000," said the report.
The most significant sources of the increased fuel demand for production were electricity generation and shipping. Over the period 2000 - 2006, the volume of fuel purchased by the shipping industry increased at an average rate of 122.2 per cent.
That growth was largely associated with a 2005 agreement between Petrojam and a Greek energy and shipping conglomerate, Aegean Marine, to operate a bunkering station at Jamaican ports. Jamaica represents the second largest market for Aegean sales volume.
What's more alarming, however, is that Jamaica's fuel efficiency as measured by per capita usage fared poorly against regional partners in Latin America and the Caribbean. Each Jamaican used 9.7 barrels of oil equivalent (BOE) in 2006 up from nine in 2000, while the Latin American Energy Agency indicates that per capita energy consumption within the region is estimated to have increased to 8.4 BOE in 2006 from 7.9 BOE in 2002.
As measured by the ratio of fuel imports (net of fuel imported for sale to the transshipment industry) to GDP, the oil bill grew from 8.2 per cent in 2000 to 15 per cent in 2006.
The BOJ report concluded that revision to Jamaica's energy policy was required to improve Jamaica's energy efficiency and curb the country's growing fuel dependency.
Jamaica barely made enough hard currency from its export earnings to pay for its oil bill in 2006. But the country's gross level of inefficiency in converting a barrel of oil for its energy needs perhaps played a more important role in the government's decision to fast-track the legislation of a new energy policy.
Minister of Clive Mullings says his ministry is working assiduously to have Government''s Energy Policy promulgated into law by March 31.
Mullings told JIS News that consultations were held on the policy over the last four to six weeks after it was tabled in Parliament as a green paper.
"In those meetings and consultations, we took note of all the concerns and suggestions, distilled them, and that will come to inform the Energy Policy to move (it) from a Green Paper to a White Paper, and then have it promulgated into law," Mullings explained.
US$1.76 billion, or 93 per cent of Jamaica's export earnings, was spent by the government to import 30.8 million barrels of petroleum products in 2006. The bill was approximately US$2 billion in 2007.
Jamaica's overall fuel bill grew from US$648.1 million, or 21.6 per cent of total imports in 2000 to US$1.76 billion, or 34.7 per cent of total imports in 2006.
According to a special report by the Bank of Jamaica published in its quarterly monetary policy report for the three months to December 31, 2007, the most significant contributor to this increase was an annual average increase of 21.3 per cent in the price of crude oil over the period.
But the central bank noted that demand for fuel, in volume, also grew steadily at an annual average rate of 3.4 per cent between 2000 and 2006.
"This growth contributed approximately 30.0 per cent of the average annual increase of the national fuel bill over the period and also contributed to the deterioration in Jamaica's current account deficit to 11.4 per cent of GDP in 2006 from 4.7 per cent of GDP in 2000," said the report.
The most significant sources of the increased fuel demand for production were electricity generation and shipping. Over the period 2000 - 2006, the volume of fuel purchased by the shipping industry increased at an average rate of 122.2 per cent.
That growth was largely associated with a 2005 agreement between Petrojam and a Greek energy and shipping conglomerate, Aegean Marine, to operate a bunkering station at Jamaican ports. Jamaica represents the second largest market for Aegean sales volume.
What's more alarming, however, is that Jamaica's fuel efficiency as measured by per capita usage fared poorly against regional partners in Latin America and the Caribbean. Each Jamaican used 9.7 barrels of oil equivalent (BOE) in 2006 up from nine in 2000, while the Latin American Energy Agency indicates that per capita energy consumption within the region is estimated to have increased to 8.4 BOE in 2006 from 7.9 BOE in 2002.
As measured by the ratio of fuel imports (net of fuel imported for sale to the transshipment industry) to GDP, the oil bill grew from 8.2 per cent in 2000 to 15 per cent in 2006.
The BOJ report concluded that revision to Jamaica's energy policy was required to improve Jamaica's energy efficiency and curb the country's growing fuel dependency.