Finance Minister Dr. Nigel Clarke - file photo
Finance Minister Dr. Nigel Clarke has said the government would have been experiencing regret today had it gone ahead with oil hedging arrangements.
The statement comes amid Monday's massive collapse in world oil markets.
The price of a barrel of West Texas Intermediate, which is the benchmark for US oil, fell as low as minus $37.63 cents a barrel.
Demand for oil has all but dried up as lockdowns across the world have kept people inside.
The BBC reported on Monday that the price of US oil turned negative for the first time in history.
That means oil producers are paying buyers to take the commodity off their hands over fears that storage capacity could run out in May.
In a statement Monday afternoon, Finance Minister Dr. Nigel Clarke said Monday's dramatic fall in prices is a reminder of the profound uncertainty in the world at this time.
He disclosed that over the last few weeks, a small team from the ministry has been working with bankers and multilateral partners on the possibility of hedging Jamaica's future oil supplies.
Dr. Clarke said the team has been supplied with daily hedging instruments, which have not been cheap.
He said if the government had gone ahead based on the prices a few weeks ago, it would have regretted the decision today.
The Finance Minister underscored that this is why it is important the government does not rush the decision-making process.
Dr. Clarke said he has asked the Bank of Jamaica and the Finance Ministry team to continue to review oil hedging options and advise on the next steps.
An oil hedge is among one of the mechanisms the Opposition People's National Party has suggested as a way to help secure the Jamaican economy amid the fallout from COVID-19.
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