PM Holness orders audit of oil losses at Petrojam

The Board of State-owned oil refinery, Petrojam, is to conduct an audit to identify and explain the loss of 600,000 barrels of oil over a five-year period.

The directive, from Prime Minister, the Most Hon. Andrew Holness, comes in the wake of the Auditor General’s report into the entity’s operations, which highlighted the losses.

Speaking at a press conference at Jamaica House on Monday, Holness said he met with Petrojam’s Board for three hours last Friday to discuss the report’s findings.

He said that based on the report and the meeting’s outcome “I have come to the conclusion that there needs to be a forensic audit into these losses”.

“There could be the possibility of pilferage and, indeed, we have heard anecdotal cases of pilferage of finished products. But it could (also) be wastage… it could be technical losses. We need to know exactly what the proportions are and what has caused it,” he said.

The Prime Minister said he has also directed the Board to ensure that minutes are recorded of the weekly meetings of the committee dealing with Petrojam’s pricing mechanism and forwarded to the Ministry of Finance and the Public Service’s Enterprise Division or the Minister for review.

He noted that no minutes of the meetings are currently being recorded.

The Prime Minister said there is public concern over how the refinery’s prices are calculated.

He noted that the response has traditionally been that the formula is the “best pricing mechanism”, but pointed out that “sometimes, you hear that world oil prices are going down, yet when you go to the pump, [local] prices tend to be going up”.

Holness said following consultations with the Board, he will be recommending that consideration be given to introducing independent stakeholder input in the pricing process.

“It is a tricky area because you don’t want people to come in and then take out information. So, who we select… you would have to be careful that [they] don’t have any special interest and that they are vetted; that will help to bring some level of clarity,” he pointed out.

Holness cited personnel from the Ministry of Finance and the Public Service, and Consumer Affairs Commission for possible consideration, adding that “I will give further details as to how that can be done”.