Jamaica should exploit the lower prices of Oil and fast
For a country that is a non producer of oil and has had trouble with currency matters lately it is imperative that producers and owners of the factors of production seek to make hay while the proverbial sun shines. based on all indications oil prices are expected drop even further some analysts predicts as low as 5 USD a barrel. But we all know that this not going to last forever.
The Saudi's are doing their earnest to flood the market with cheaper oil to drive their competitors to the wall or out of the market this strategy may or may not work given that Iran and US Oil frakers are prepared to weather out this wave until the Saudi's let up.
But back to Jamaica, what exactly can we do to harness the benefits of lower oil prices. Before I tell you about the benefits I must comment on the current predicament we are in with the oil hedge that that we bought into. I wonder who is Jamaica's insurance broker, because apparently they must have colluded to not only bring bad gas into Jamaica but also to give the Government of Jamaica bad advice as to the direction the price of oil was going.
PetroJam's two largest customers are JPS and JUTC so any effective change needs to occur in either one or both companies, preferably JPS. JPS should take the time and savings from the lower gas bill to make the process of electricity generation more efficient and less oil intensive. For JUTC, optimization and restructuring of Bus routes and vehicular conditions is the best way to go ; the fact is an inefficient bus burns more fuel!
The lower Oil bill is expected to drive down production costs in Jamaica as best and as quickly as possible firms should lower their prices giving persons more money in hand hopefully to save at Commercial Banks, Credit Unions and other FIA institutions. The Golden Rule about savings is still valid even though it takes much more than increased savings to drive growth. Increased savings howver does imply more loanable fund s to investors and borrowers of capital which inturn increases GDP. These ideals cannot happen overnight however if we wait too long and the price of oil starts to increase again as it will. It will be too late for Jamaica and we'll be back to square 1 or worse yet square zero.
#Thinkonthesethings #CollegeEconomist #OilPricesDown
The Saudi's are doing their earnest to flood the market with cheaper oil to drive their competitors to the wall or out of the market this strategy may or may not work given that Iran and US Oil frakers are prepared to weather out this wave until the Saudi's let up.
But back to Jamaica, what exactly can we do to harness the benefits of lower oil prices. Before I tell you about the benefits I must comment on the current predicament we are in with the oil hedge that that we bought into. I wonder who is Jamaica's insurance broker, because apparently they must have colluded to not only bring bad gas into Jamaica but also to give the Government of Jamaica bad advice as to the direction the price of oil was going.
PetroJam's two largest customers are JPS and JUTC so any effective change needs to occur in either one or both companies, preferably JPS. JPS should take the time and savings from the lower gas bill to make the process of electricity generation more efficient and less oil intensive. For JUTC, optimization and restructuring of Bus routes and vehicular conditions is the best way to go ; the fact is an inefficient bus burns more fuel!
The lower Oil bill is expected to drive down production costs in Jamaica as best and as quickly as possible firms should lower their prices giving persons more money in hand hopefully to save at Commercial Banks, Credit Unions and other FIA institutions. The Golden Rule about savings is still valid even though it takes much more than increased savings to drive growth. Increased savings howver does imply more loanable fund s to investors and borrowers of capital which inturn increases GDP. These ideals cannot happen overnight however if we wait too long and the price of oil starts to increase again as it will. It will be too late for Jamaica and we'll be back to square 1 or worse yet square zero.
#Thinkonthesethings #CollegeEconomist #OilPricesDown
Comments
Post a Comment