Editorial | Oil and transport

 Wayne Henry’s endorsement of the idea of work-from-home and other flexible and staggered work schedules to save fuel intuitively, and on the basis of past evidence, makes sense.

What Dr Henry and the agency he leads, the Planning Institute of Jamaica (PIOJ), must now do is support the proposal with publicly available analytic data and centre concept in a broader public transportation policy.

At the same time the PIOJ should also publicly share its analysis of the likely effect on commuting on the government’s decision to raise the weekly price cap -  by 178 per cent - on the price of diesel, rather than apply the mechanism to all categories of automotive fuels.  This policy, on its face, will primarily affect, or have its greatest impact on the drivers of large, diesel-powered sports utility vehicles, which are favoured by government ministers, and goods haulage public transportation.  

Since the United States and Israel began the war on Iran in February and Tehran responded by closing the Strait of Hormuz, oil prices have risen by as much as 60 per cent, with significant stress to the global economy.  In Jamaica’s case, the US$60-per-barrel (pb) price on which the government framed its 2026/27 budget is closer to US$100 pb.

Last week, in part to ease the pressure on the public finances, the state-owned Petrojam oil refinery lifted, from J$4.50 to J$12.50 per litre, the upper band within which it either increased or decreased its weekly oil price postings.  But the new threshold, instead of being applied across the board, as energy minister Daryl Vaz has suggested it would be, is only for regular and ultra-low sulphur diesel. The J$450 cap remains for other fuels.

In the meantime, Parliament’s economy and production committee has started a review of work-from-home and flexible-work-hour policies, some of which were widely used during the COVID-19 pandemic to prevent the spreading of the virus in crowded environments.  Jamaica’s flexi-work legislation allows workers and the employers to agree on a 40-hour work week spread over any of the seven days, with a maximum 12-hour work day.

“The objective (of the parliamentary review) is not simply to revisit practices introduced during the pandemic, but to determine whether there are sustainable approaches that can help Jamaica become more productive, more competitive, and better prepared for future economic challenges,” said the committee’s chairman, Alando Terrelonge.

Dr Henry, the PIOJ’s director general, told the committee that the flexible, hybrid and remote work, causing employees to commute less, or at staggered hours, would help to fuel the oil price shock and its effects on the wider economy.

There was no immediate projection of likely changes in commuting patterns under various scenarios and how this would impact fuel consumption. Nor has there been any published indication of the price/demand elasticity among the operators of diesel-powered vehicles or other areas of production.

What is known is that ground transportation accounts for about a third of Jamaica’s annual fuel imports (over 20 million barrels.  

In 2020, analysts at the International Energy Agency (IEA) concluded that “if everybody able to work from home worldwide were to do so for just one day a week, it would save around one per cent of global oil consumption for road passenger transport per year”.

It added, “Taking into account the increase this would bring in energy use by households, the overall impact on global CO2 emissions would be an annual decline of 24 million tonnes (Mt), equivalent to the bulk of Greater London’s annual CO2 emissions.”  

In March, the IEA noted that commuting accounted for between five per cent and 30 per cent of car activity across regions and that “at the national level, three additional remote working days, for those whose jobs allow for it, could reduce oil consumption from cars by two per cent- six per cent”.

“If an average individual driver shifts from no teleworking to three remote days in a five-day workweek, their personal car oil consumption could be reduced by up to 20 per cent,” it added.

Reducing its speed on highways by 10 kilometres per hour could cut an individual driver’s oil use by five per cent to 10 per cent and “decrease national oil use for private cars by one per cent to six per cent, depending on local infrastructure and driving habits”. 

In Jamaica, an inadequate, and in some cases ramshackle, public transportation system and insufficient planning coherence between where people live and where they work, has led to an explosion of private vehicles. The resultant gridlock on the island’s roads and wastage of tens of millions of man hours annually in traffic jams. 

The IEA’s data suggest the logic of flexible work arrangements and a national transport policy that incentivises a safe, reliable and efficient public commuter system and disincentivises private vehicle ownership. There is need for domestic data on these issues.

Minister Vaz has promised a green paper on a national transport policy, but the issues to be addressed in that paper are not discrete from what is being attended to by Mr Terrelonge’s committee.

Correction

In the editorial of Sunday, June 14, it was stated the Privy Council’s ruling on its removal as Jamaica’s final court said that any new court instituted above Jamaica’s Court of Appeal must be subjected to a referendum. That was not the case.  The error is regretted.