While government has reduced the cost of fuel Cabinet Secretary Dr Roger Luncheon does not believe customers of the Guyana Power and Light Company will see a reduction in their bills.
“It seems logical that prices for fuel have fallen significantly and therefore fuel-based products would be expected to have their prices fall too, perhaps in the real world this may be so but we have to understand that GPL is a peculiar creature,” Luncheon explained on Friday at his post Cabinet press briefing.
Luncheon said while he would hesitate to pronounce authoritatively on the subject, the cost of the production of electricity does not have much to do with fuel prices as GPL is heavily subsidized by government. “In essence if there were some mutual situation where there was a flow through from prices of fuel to the prices we pay for electricity then tariffs would be off the map… it does not… because of the subsidy government provides… billions of dollars worth of subsidy,” he explained.
During last year’s budget presentation Finance Minister Dr Ashni Singh had stated that in the absence of tariff increases, last instituted in 2007, government was injecting $5.8 billion to support that company in meeting its cash flow requirements. In addition, he said $5.4 billion were also budgeted to be transferred to GPL to support key projects such as the upgrade of its transmission and distribution network, the loss reduction programme, and other activities required in anticipation of the Amaila Falls Hydropower Project. However, $5 billion from the $10.2 billion stated had been cut by the opposition.
Of those monies pensioners have benefited from a $30,000 a year subsidy on their electricity bills.
Meanwhile, Luncheon also called on the private sector to lead the cause of having cooking gas and aviation fuel reduced as government does not have the amount of control over those two petroleum commodities since they are more hinged on world market forces.
“The minister pointed out that cooking gas prices and aviation fuel were not the subject of monitoring and regulation by the state to the same extent as kerosene, diesel and gasoline fuel products and as such the impact of the decision that led to the decreases in fuel and fuel product prices might not necessarily lead to the decrease in the price of aviation fuel and more importantly cooking gas,” Luncheon pointed out.
“The feeling was that the private sector would on the basis of market forces respond appropriately where these products are concerned to those decreases in prices that were occurring in the other elements of the domestic fuel industry,” he went on to state.
