The Guyana Power and Light (GPL) has forecast an $11B shortfall for 2012, with an escalation in fuel prices being the key factor and the utility has presented a calculation for a 19.5% tariff hike which the government says it will work to avoid.
According to the Government Information Agency (GINA), Chairman of the corporation, Winston Brassington during the company’s shareholders’ meeting on Friday stated that the acceptable 2010 performance of the power company would be overshadowed by the deficit in this year’s power budget.
He said that fuel prices moved from US$80 per barrel to a projected $120 per barrel this year. In another GINA release, Brassington stated that the company’s 2012 fuel bill is budgeted to be $25.3B, compared to $22.4B in 2011 and $16.5B in 2010.
It was noted by GINA that in 2010 GPL faced an average fuel price of US$78 per barrel.
Brassington said that based on its licensing agreement, the company was entitled to a 19.5% tariff increase this year.
Compared to the $553M profit in 2010, GPL has registered a preliminary loss position of $4.4B for 2011 and current projections indicate a further loss for 2012 of $5.6B.
Cabinet Secretary, Dr Roger Luncheon, who spoke at the forum, disclosed that the government intends to rely on a number of interventions to meet the shortfall. He made the comment in recognition of the impact the tariff increase might have on the working class as well as businesses.
Luncheon said that the government has opted to allow GPL to introduce only bearable tariff increases while seeking consideration in the National Assembly of subsidies as was the case in 2008.
In addition, GPL would be expected to pursue more aggressive loss prevention practices and debt recovery in order to meet the shortfall without undue hardships on the populace.
The power company released several selected performance indicators via GINA; among them
-an after-tax profit of $553M in 2010 compared to an after-tax profit in 2009 of $1.8B
-reduction in technical and commercial losses of 3% to end at 31.3%
-expansion of revenue by 10.82% to achieve total sales of $26.5B
-generation costs of $19.9B up from $15.9B in 2009
-expansion in the number of new customers by 5,795 to end at 151,288 customers.
