BASSETERRE, St. Kitts – SIX months after an election promise to remove the fuel surcharge, consumers can anticipate a hike in electricity tariff rates soon.
Consumers were relieved last year when Prime Minister and Minister of Finance Hon. Dr. Denzil Douglas made a December 15 announcement to put an end to the burdensome fuel surcharge with immediate effect.
However, as the government rolled out its 2010 list of austerity measures, it has been announced that electricity costs would increase shortly. No percentage for the increase has been announced yet, but Douglas attributed the expected jump in costs to the rising price of fuel.
“You will recall last year we removed the fuel surcharge because we believed that the price of fuel had sufficiently fallen to allow us to bring some relief to our consumers. But now we are seeing the price of fuel creeping up again. The cost for maintaining the services are increasing. We therefore believe that instead of introducing the fuel surcharge we will however revisit the formula for the tariff,” Douglas explained in a parliamentary statement made last Friday (Jun. 11).
The adjustment in electricity tariffs is one of a number of fiscal measures to be taken by the government following consultations with the International Monetary Fund (IMF). Beyond that, PM Douglas explained that the formula for calculating electricity rates is “quite old” and needs to be “properly adjusted”.
The news may not sit well with consumers, as they will soon see higher electricity bills. However, the strategy is expected to save the government as much as EC$ 14 million annually, according to Douglas.
The announcement comes at a time when consumers have been in the dark more than ever with regular blackouts and lengthy periods of load shedding. In response to the current irregular supply of electricity, Douglas announced his government’s intention to purchase four new generators – a move he said would increase capacity and efficiency at the Needsmust Power Station.
At this point, it is not known how much this move will cost the government or how it will affect consumer spending even further.
More fiscal policy changes are expected to be introduced as the government aims to address the nation’s economic woes. No timeline has been set for this measure to take effect.
