Financial analyst Dennis Chung says that news of the impending disbandment of the Petroleum Corporation of Jamaica (PCJ) should be welcomed by the public, as it would remove one less layer of bureaucracy from the government.
Chung, in an interview with BUZZ on Tuesday, noted interestingly that the state-owned oil refinery Petrojam was being sold petroleum at a marked price by PCJ before Petrojam did the same to private gas retailers.
“I don’t see any problem with disbanding the holding company. The real operations [are] at Petrojam. It would have been a problem if you disband Petrojam but I don’t see any risk with [getting rid] of PCJ,” Chung explained.
“As a matter of fact, one of the things that people haven’t looked at, is PCJ would buy the gas, mark it up and sell it to Petrojam. And then Petrojam would mark it up again. So, it’s a good thing that PCJ is disbanded so that Petrojam can buy the gas directly and mark it up one time,” he added.
“What you’re actually doing is shrinking the size of government and the bureaucracy,” the financial analyst told BUZZ.
Chung further argued that the country needs more entities within the government to be disbanded, in an effort to “get rid of a lot of the double charges sometimes that happen to us.”
Chung told BUZZ that he doesn’t see any severe implications on the price of gas across the island – but projects increases would be more attributable to the alleged Iranian missile attack on a Saudi oil facility on Monday.
The attack, which was reportedly a drone strike, took out a combined total of half of Saudi Arabia’s daily oil production.
“With oil prices up by 15 percent with the missile attack on Saudi Arabia just this week, that is what might impact prices,” he said.
Moreover, Chung hinted that Petrojam’s recent history of mismanagement and lost monies should be more of a concern to Jamaicans, than the dissolution of the PCJ.
“What we need to ensure though, is that we have proper management in place at Petrojam, obviously, because that’s one of the issues we’ve had. So, I think that contributes more to an inefficient energy sector that causes higher prices than removing PCJ,” he told BUZZ.
Reliable industry sources indicate that Cabinet has approved a decision to disband the Petroleum Corporation of Jamaica (PCJ). Read more on our previous BUZZ story here.