Energy, Mining and Telecommunications Minister, Clive Mullings has expressed dissatisfaction with what he describes as the lack of urgency being displayed by persons regarding the impact that current trends in the price of oil could have on the local economy.

Speaking at the weekly meeting of the Kiwanis Club of North St. Andrew held at the Police Officers Club on Thursday, February 21, Minister Mullings said that the movement in global fuel prices continues to impact on non-oil producing countries such as Jamaica for which there was “no energy security”. He pointed out that the price of oil per barrel increased over a five-year period from US$36.45 in 2003 to US$100.40 currently, noting that the annual average spot price of oil increased by as much as 132 per cent during the period.

“Yet despite all of these realities, our consumption levels continue to increase at a rate that is faster than the growth rate of our Gross Domestic Product (GDP),” the Minister pointed out.

In 2006, Mr. Mullings noted, Jamaica imported approximately 30.9 million barrels of oil, 21.2 millions of which went to the non-bauxite producing sectors. This, he noted, represented “a record level for oil consumption and continuation on this increasing trend in consumption”.

Despite rapid increases in world prices, we have continued on this increased consumption trend. So the total oil bill for non-bauxite sectors in 2006 was 33 per cent that is 13 per cent higher than that of 2000. The increase in the oil imports means that the rate of growth was 5.5 per cent, which was much higher than the rate of growth of our Gross Domestic Product,” he stated.

The Minister further explained that, “Even if the average growth rate were cut in half, at its current levels, in 15 years time, the country’s oil import bill would be approximately 50 per cent higher than what it is today”.

Minister Mullings pointed out that with economic growth comes increased consumption, citing the need to effectively deal with the challenges posed as development occurs. The solution, he stressed, could not be restricted to implementing conservation measures, but had to incorporate a number of other measures. These, he said, include a reduction in the dependence on oil for energy and looking at renewables; energy efficiency measures; as well as examining how best to incorporate a range of technologies into the country’s building codes.

“If we don’t do those, then our oil bill will increase from US$2.2 billion last year to possibly US$2.5 billion this year. Further, we will continue on a trend that will rob us of the opportunity of becoming truly first world, and, of course, exacerbate the social challenges that we face. So we have to do that in a real way to ensure that we go on the road to real development. That is the stark reality,” the Energy Minister asserted.