The Opposition Spokesperson on Energy, Phillip Paulwell says the non-existence of an oil hedge in Jamaica has left the country’s energy market vulnerable.
He says an Oil Hedge would guarantee some level of insurance against price volatility. His comments follow last Saturday’s drone attack on Saudi Arabia’s oil reserve which is still expected to negatively impact the global market.
There were global repercussions when the news broke, as the facility supplies approximately 5 to 10 percent of the world’s oil.
At the local level, motorists were alarmed, believing that the incident would result in a rise in petroleum. This meant spending more money at gas stations.
The Opposition spokesperson on Energy, Phillip Paulwell says this is why an oil hedge is necessary to reduce Jamaica’s exposure to fluctuating oil prices.
Paulwell notes that the government had decided to use the funds accumulated under this hedge. He says these funds should have remained for subsidy purposes in the wake of a possible energy crisis.
Back in 2018, Paulwell had called for the government to remove the hedge levy citing that this would ease the pressure on motorists. He stated that there was no need for the government to collect this levy as the JLP led government had long abandoned the hedge protection against oil prices.