by STAFF WRITER
October 5, 2022
NASSAU, Bahamas, Oct 5, CMC – The Barbados government has confirmed that the country’s main electricity company will be increasing its monthly fuel charge in response to rising fuel costs, with the rate increase set to be reflected in consumers’ electricity bills beginning November.
But Prime Minister Phillip Davis the increases will only be temporary and are expected to come down over the next 12 to 18 months.
“For a large majority of BPL (Bahamas Power and Light) customers, who consume less than 800 kWh (kilowatt hours), the fuel charge is increasing by two cents per kWh, which will result in an increase this quarter of less than US$20 per month. If your current monthly bill is US$182 or less, you fall in this category,” he said.
“For those who consume more than 800 kWh, the increase will be 4.3 cents per kWh. I want to note here that we will raise the VAT ceiling from US$300 to US$400, so going forward, no VAT will be due on any electricity bills under US$400, which will take some of the sting out of the 4.3 cent increase for a great many BPL consumers subject to the larger increase.”
In February BPL has announced plans to increase customers’ fuel charges, but the company later recalled the statement with government describing the announcement as premature and ultimately denying the company approval for the increase.
Works and Utilities Minister Alfred Sears later said that BPL would have no choice but to pass on increased fuel costs to its customers by higher electricity bills unless the government provides a subsidy to the company which it eventually did given surging fuel costs globally.
Prime Minister Davis addressing the government’s decision to delay the increase of electricity bills, said it was because of the economic hardship being experienced by Bahamians following the coronavirus (COVID-19) impact and most recently, the inflationary cost of living.
“On top of that, in February, the Russian-Ukrainian war began, disrupting global trade and raising oil and gas prices sharply,” he said, adding he wanted to see stronger economic growth and more Bahamians working before giving the power company the green light to raise electricity bills.
“When times are tough, coming up with an extra US$20 a month is no small thing. Introducing the increase at this time of the year coincides with lower electricity consumption as opposed to the increase coming during the spring and summer months, when people consume more electricity. During this interim period, the government decided to provide support for BPL operations for an interim period,” he said.
“Unfortunately, we can’t postpone the increase any longer. Now that we are past summer, and moving into a period of lower electricity usage, the government has approved BPL’s request for this phased-in increase.”
BPL said the price increases will be gradually phased in from October 1 to November 30, 2022; December 1, 2022 to February 28, 2023; March 1 to May 2023; June 1 to August 31, 2023 and September 1 to November 30, 2023.
“During each phase of the implementation, customers can expect an increase of two cents per kWh up to 800kWh and 4.3 cents for all units over 800kWh,” BPL said in a statement.
Prime Minister Davis listed several measures his administration will be implementing to help soften the impact of rising prices. Among them include the decision to phase in the price increases incrementally, allowing for customers to better prepare.
“We have worked to minimise the impact in multiple ways: First, those who consume less, and a great many households fall in this category, will see a lower increase – two cents instead of 4.3 cents per kilowatt hour.
“Second, the increases are phased in over time, allowing consumers to plan ahead. And third, the VAT ceiling for electricity will now be raised from US$300 to US$400, so no VAT will be due on bills up to US$400.
“And most importantly, these increases are short-term. After implementing price increases in stages, over the next four quarters, BPL calculates that the fuel charge will begin to come down,” Prime Minister Davis said, pleading with Bahamians “to hang in there just a little longer”.
“We have been working to find a way to fund this transition to cleaner energy and renewables, despite our enormous debt burden and fiscal crisis” he said.