Petrojam adjusts pricing mechanism for diesel and ULSD, higher prices expected

Motorists who use automotive diesel oil and ultra-low-sulphur diesel (ULSD) are set to see a significant increase in prices at the pump as Petrojam has announced changes to its pricing mechanism for those fuels, citing rising global oil prices and the financial impact recent market volatility has had on the state-owned oil refinery.

In a statement issued today, Petrojam said the maximum pass-through of price increases or decreases for automotive diesel oil and ULSD will move from the current cap of $4.50 per litre to $12.50 per litre.

The change is scheduled to take effect on Thursday, June 11.

Petrojam said the adjustment is intended to bring ex-refinery prices into closer alignment with movements in the benchmark US Gulf Coast reference.

The refinery stated that its revised pricing tiers will continue to protect consumers by preventing the full and immediate pass-through of extreme price shocks.

According to the company, the new regime delivers proportionality by ensuring that major market shocks are met with controlled responses locally. 

It also guarantees balance by applying the same mechanism whether prices are increasing or decreasing, said Petrojam.

Dealers and marketing companies will continue to add their respective markups in determining retail fuel prices.

Petrojam said the changes are designed to strengthen the company's ability to confront shocks, disruptions, and crises in the global oil market.

The refinery noted that since the latest bout of price volatility triggered by the US-Israel war on Iran in late February 2026, its previous pricing regime required the company to absorb up to $21.67 per litre of the average increase of $59.30 per litre on transportation fuels through the end of May.

According to Petrojam, that absorption cost the company nearly US$22.7 million, or approximately J$3.6 billion, over the three months.

The company said the financial burden also limited its ability to respond to higher replacement costs for crude oil and finished petroleum products.

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