Georgetown: Prime Minister Samuel Hinds has disclosed that the Guyana Power and Light Incorporated (GPL) is trying to determine the most feasible way to reflect the drop in fuel prices in electricity costs to consumers.
Hinds explained that the power company is fearful of negatively impacting its sustainability because of the unpredictability of oil prices on the international market.
“As far as I understand, GPL on the call of the President is looking to pass on as much of the drop in fuel prices as they can to consumers without impacting it programme for sustainability or development,” he said.
The Minister in charge of energy explained that since fuel consumes 70 per cent of power company’s generation cost, it is necessary that the company scrutinises every aspect of its decision taken to reduce electricity rates as it strives to fulfil the requests of President Donald Ramotar.
“From the inception there has always been a calculation of rebate or surcharge as the price of oil fluctuates,” the Prime Minister explained while adding that this stipulation is only applicable if the change in oil prices is 10 per cent or greater.
He added that this rule also applies to the annual projections of fuel prices made by the power company. However, he said the current state of fuel prices has not been seen since 2009.
“Since 2009 prices have been somewhat constant so there has not been a significant need for changes in electricity. Further, the Government has been subsidising about 20 per cent of the cost to produce electricity,” the Prime Minister pointed out.
In addition, he said the cost consumers pay for a unit of power at present is about 25 per cent below the allowed full cost to provide power. “So you see consumers have been enjoying a significant subsidy all along,” Hinds said.
After being sold on the international market for approximately US$100 per barrel, fuel prices began to drop last June. About two weeks ago, fuel prices dropped to approximately US$45 per barrel.
Reduction in fares
When this happened, Finance Minister, Dr Ashni Singh declared a 30 per cent reduction in fuel prices at Guyoil gas stations. Since this declaration, private gas stations have since followed suit, placing pressure on public transportation holders to drop their fares.
Individuals of the public transportation sector are to meet shortly to discuss a reduction in fares.
However, President Ramotar had told this newspaper that he had tabled a proposed reflection of the low gas prices in electricity rates to GPL even before the Finance Minister made his announcement.
It was later disclosed by Head of the Presidential Secretariat, Dr roger Luncheon that GPL has agreed to lower its rates but efforts to speak with GPL officials were unsuccessful.
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