COVID fuelling massive losses in petroleum industry

about 3 years in Jamaica Observer

This is part of a series by Jamaica Observer reporters and editors looking at the impact of the novel coronavirus on various sectors of the economy since the first case was reported locally on March 10, 2020.
MANDEVILLE, Manchester - With reduced opening hours for businesses and a work-from-home order imposed by the Government as part of its coronavirus control measures, the demand and sale of petroleum has been drastically reduced as a result of the pandemic.
"We are seeing sales decrease for some members as much as 60 per cent when compared to [the period before] COVID. We are also seeing reduced sales in the convenience stores," president of the Jamaica Gasolene Retailers Association (JGRA), Dianne Parram, told the Jamaica Observer.
"There have been sporadic increases, because [during the election campaign] we saw an increase. Also, at Christmas, we saw an increase too. There has been [times] when we see increases, but overall, we are seeing as much as 60 per cent decline in business for our members," she said.
Furthermore, Parram said the expenses of operating a service station remain the same.
"Our rent remains the same, most of our overheads remain the same, so that is what is causing the significant losses [that] our members are facing," she said.
The JGRA president said the imposition of curfews as part of the effort to reduce the movement of people and thereby contain the spread of the virus has also reduced profitability of service stations, particularly those that previously operated for 24 hours.
"With the curfews that have been implemented.... what you find again is significant decline in sales in those periods because we no longer have 24-hour gas stations in Jamaica. Even if you [previously] operated two shifts, you can't [do so anymore] with the current curfew at 8 o' clock because for yourself and your staff to be home at 8 o' clock, you have to close off at 6:00 pm or 7:00 pm," said Parram.
"What you find is that once you are about to close there is a steady build-up of traffic coming in and rushing towards you.... There is a need for certain services, certainly there has to be some consideration for the industry, in terms of allowing us [to operate longer hours]," she added.
She argued that the petroleum sector is vital to the transport sector and should be treated as such.
"When those taxis have to go out from 4:00 am, who is there to service them? There are people that are allowed to do certain things, but there has to be a support structure around the operation," she said.
The petrol industry has also suffered with more people working from home as well as significantly reduced face-to-face school resulting in reduced motorised traffic, Param said.
"There has been significant reduction in the motoring population. However, we can look at ways to provide the service in order to support [restoration of] the economy to some amount of normalcy, and we want to work with the Government," Parram declared.
"We want to be at the forefront ..." she added.
Errol Edwards, proprietor of two Total service stations in the Corporate Area, shared similar sentiments.
"The impact to the business sector has been severe by virtue of reduced business hours and the fact that a lot of people have been working from home, so it would have affected commerce. When you restrict business it affects people's income, so it means that their spending power is also impaired, because it would have devastated their ability to buy goods and services," he said.
When asked how much longer businesses can manage to stay afloat with the current restrictions, Parram pointed to a year of losses.
"I believe [it can't] be for much longer, because we sustained one year of operating at 50 per cent and all overheads remain the same. You pay insurance as an annual fee. The risks associated with business remain the same," she said.
"I really think that we [should] encourage returning the economy to some amount of normalcy. We really believe that implementing penalties for breaking the COVID protocols [and] enforcement is the way we should be going," she added.
"Restricting the economy is not going to help us. We must enforce the protocols that we established for COVID-19," she argued.

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