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EDITORIAL - Oil crisis provides opportunities for policy shift
published: Thursday | June 26, 2008

It is surprising, in the current environment, that there is not greater urgency by the Golding administration to reduce Jamaica's dependence on oil and the introduction of new, renewable and, where possible, cheaper forms of energy.

Which is not to say that there is dead silence on the matter from the Government. Indeed, the energy minister, Clive Mullings, has outlined plans to reduce energy consumption in government ministries and agencies, and to convert energy use in some industries from oil to natural gas. Other initiatives are also on the table.

These ideas, however, are not new. They have been around for ages. What is lacking, which we hoped would be different with the Golding administration, is clean, robust debate, followed by implementation. The meandering, however, continues.

We believe, though, that the Golding Government, more than any previous administration, because of a confluence of circumstances, is in a position to effect significant change and to de-politicise the energy debate. There is the possibility to end hikes in petrol prices as a potential flashpoint, frightening Jamaican governments into paralysis.

Prices hurting everyone

Hovering at US$140 per barrel, the price of oil is hurting everyone, not just Jamaica, whose bill for the commodity will climb close to the US$3 billion mark. That is more than the country grosses, combined, from tourism and mining. It is nearly a third more than what Jamaicans abroad remit annually.

What is worrying in this situation is that Jamaica, which imports 90 per cent of its energy needs, shows no sign of moderating its oil consumption; and we remain energy-inefficient.

For instance, in the mid-1980s, per capita consumption of energy in Jamaica was about five and a half barrels of oil equivalent annually. By the middle of this decade that had doubled, and there is every sign that this has worsened.

Over the same period, we have, in terms of efficiency, measured by energy consumption to output of goods and services, performed poorly. It used to take about three and a half barrels of energy equivalent oil for every US$100 of GDP in real terms. That moved to the energy equivalent of more than five barrels of oil; and that is despite significant gains in the bauxite/alumina sector.

Little gain

Part of the problem is that we have made relatively little gain in the non-mining sector, and the explosion of private motor vehicles since the early 1990s has driven up energy consumption without concomitant gains in output of goods and services.

People have been willing to protest, sometimes violently, when petrol prices rise. What is different now is that, even without government action, prices at the pump have been rising. But more important, with unfiltered access to information, people are aware that the hike in energy prices is a global phenomenon. The Government is therefore in a good position to engage people frankly on public policy, including matters of conservation.

It is an opportunity, too, we feel, for the Government to place a floor price on petrol at the pumps, and to introduce a percentage rather than a flat tax on the commodity. The gains would be used to finance energy schemes, including green projects.

There is need for a sense of urgency from the Government.


The opinions on this page, except for the above, do not necessarily reflect the views of The Gleaner. To respond to a Gleaner editorial, email us: editor@gleanerjm.com or fax: 922-6223. Responses should be no longer than 400 words. Not all responses will be published.

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