Resume oil hedge, Mr Holness
THE EDITOR, Sir:
Dr Peter Phillips created the Energy Stabilisation Fund in March 2015 .The estimated cost of this oil hedge contract with Citibank and the Government of Jamaica was $9.5 billion. It was ended by the Holness administration.
I supported Andrew 'Holness stance because the circumstances for hedging oil back then was foolish. Oil price projections remained low and stable until now. I still believe we would have wasted $9.5 billion or more if the new administration had decided to extend the contract with Citibank.
Let's fast-forward to now. Post President Donald Trump's Iran deal exit, oil will be moving upwards at a quicker pace. The recent Iran and Israel military engagement is a concern for high oil prices .
When the implications of Venezuela's place in the market is taken into consideration, my humble advice to the Government of Jamaica is that it is now time to hedge oil before it's too late. When President Trump hits Iran with tough sanctions, the sting will be hotter.
The wise change when the circumstances change.
If the cost of oil is increasing dramatically, Finance Minister Dr Nigel Clarke needs to have a look at lifting the burden off petroleum users. Therefore, the special consumption tax on fuel ought to be cut.
Ocho Rios, St Ann