Petrojam absorbs US$156,000-a-day loss after gas unit shuts down in April

Jamaica’s sole oil refinery suffered an unexpected shutdown of its gasolene production unit in April, racking up an estimated US$3.6 million (J$550 million) in production losses over 23 days and triggering an emergency procurement contract to restore operations.

“Losses from the inability to produce gasolene are estimated conservatively to be US$156,000 per day of downtime,” Petrojam said in a contract award notice seen by the Financial Gleaner. “As such, it is urgent that the repair activities are completed as soon as possible to minimise this loss.”

The reformer catalyst — a critical component of Petrojam’s gasolene production system that converts crude oil into sellable fuel — became fully deactivated on April 3, according to the contract document. Facing the sudden loss of gasolene output, Petrojam activated emergency procurement procedures and invited three service providers — Array Industrial, TechCorr USA Management LLC, and GAR Engineering Company Limited — to submit bids for the repair works.

Array Industrial was awarded the contract as the most competitive bidder, to carry out works related to the catalyst replacement outage between April 5 and 28, 2026. The outage spanned 23 days, implying potential losses of some US$3.6 million at the company’s own daily estimate.

The Financial Gleaner was unable to confirm whether the entire Petrojam refinery was affected or only the gasolene production section.

The company had previously issued a denial in May of claims related to a fuel shortage, stating that it continued to “maintain a steady, reliable supply of all fuels”.

The failure came earlier than expected. Repairs carried out in February were intended to extend the catalyst’s useful life through to a planned major turnaround scheduled for October 2026.

The shutdown compounded an already-challenging period for the state-owned refinery. Petrojam had been projecting a net loss of US$9.63 million for the current fiscal year, an improvement from the US$26.7-million loss recorded a year earlier. The company continues to invest in capital projects slated to total US$15 million this year, led by infrastructure works for a liquefied natural gas terminal.

A comprehensive technical and economic assessment of the refinery’s operating options, commissioned from consultancy firm Muse, Stancil and Company in November 2025, is expected to be completed by the third quarter of fiscal year 2026-27.

Gas prices volatile amid Iran conflict

The catalyst outage coincided with a period of sharp volatility in global oil markets. US and Israeli strikes on Iran, which began earlier this year, sent crude prices higher and pushed Jamaican pump prices roughly 30 per cent higher — from $149.69 per litre in February to $193.78 on July 2, with a peak of $194.38 recorded on May 21 — squeezing consumers already contending with broader cost-of-living pressures.

steven.jackson@gleanerjm.com