Hopefully you are enjoying the lowest gas prices since March 15, 2018.
This is in part due to the lowest crude oil prices since July 16, 2017.
However, we know that Petrojam uses the Weekly Gulf Coast Reference Prices. This week’s USGC Ref Prices would be the lowest since June 23, 2017.
So why aren’t our prices the lowest since mid 2017? Simple answer is, taxes.
The last Revenue Measures brought taxes to their current levels:
In fact, comparing the last time diGJamaica broke down Petrojam prices was March 2012. Let us look at them:
As we can see here, the ex-refinery price for 87 gasoline today December 20, 2018 is actually $3.87 less than it was 6 years ago! However, taxes on the fuel have increased from J$25.43/litre to J$48.88 – a 92% increase.
For 90 gasoline, the increase in taxes is 91% and for auto diesel the increase is 97%.
What was the Gulf Reference Price in March 2012 you ask? US$3.12! More than twice the current price.
What about the crude oil price? The price of crude oil was over US$106 per barrel.
Additionally, taxes on fuels have been the main driver for Revenue Measures in our drive to move from direct to indirect taxation. Taxation on fuels has been projected to add J$23.6Bln to the Consolidated Fund since the 2015/16 fiscal year budget. (1)
So yes, oil prices are going down, and so are gulf reference prices. The prices at the pumps, however, aren’t returning to the good old days anytime soon.