Opposition Leader Michael Pintard said yesterday the government’s announcement that the fuel charge on electricity bills will increase is the result of a “significant blunder” by the Davis administration that will burden businesses and households in a still recovering economy.
Pintard noted that the fuel charge increase comes as the cost of oil on the global markets has been decreasing.
“It is clear that [Prime Minister Philip] Davis has abandoned the strategy and the many initiatives that were working at BPL prior to September 2021; however, he has yet to bring a coherent energy strategy to the Bahamian people,” he said in a statement.
“Our economy is still recovering from the pandemic, consumers are experiencing the pressures of inflation, and yet PM Davis seeks to burden businesses and households with electricity cost increases that are historic.”
Pintard added, “The Bahamian people will now have to pay the bill for the significant blunder at BPL by the Davis administration with respect to the fuel hedging that was put in place by the previous FNM administration.”
In late February, Bahamas Power and Light (BPL) issued a statement that the cost of the fuel charge was going to increase on March 1 from 10.5 cents per kilowatt hour (kWh) to 13.7 cents per kWh.
But that statement was later recalled and the prime minister promised that his administration would do all it can to prevent an increase in the cost of electricity.
He said Bahamians cannot afford to be burdened with more costs.
However, Davis announced yesterday from the Office of the Prime Minister that BPL has increased its monthly fuel charge effective October 1.
Davis said for customers who consume less than 800 kilowatt hours (kWh), the fuel charge will increase by two cents per kWh.
For those who consume more, the fuel charge will increase by 4.3 cents per kWh.
It is projected that the charge will be 12.5 cents in October-November 2022 for consumers who use less than 800 kWh.
For this category, it is projected that the charge will increase incrementally to 18.5 cents for the June-November 2023 period.
For those who consume more than 800 kWh, the charge will be 14.8 cents in October-November 2022.
In June 2023-August 2023, it is projected that it will be 27.6 cents kWh for consumers in this category.
According to BPL CEO Shevonn Cambridge, about 47,500 of BPL’s 110,000 customers use less than 800 kWh.
The prime minister said the government will raise the value-added tax ceiling on BPL bills from $300 to $400.
Pintard argued that the fuel hedge program executed in 2020 under the Minnis administration saved Bahamians tens of millions of dollars in electricity costs.
“There was a hedge transaction that we scheduled for the end of Q3 of 2021, but due to the change in administrations on September 16th, this transaction was left to the new Davis administration to execute,” he said.
“Given where we are today, it is my belief that this hedge transaction nor any other additional hedge transactions were executed by the Davis administration. The question is why?
“PM Davis must come clean to the Bahamian people with regards to if additional hedging transactions were executed. What is most interesting from today’s BPL press release, is that the cost of the fuel component of the BPL bill is scheduled to increase when everyone knows that the cost of oil on the global markets has been decreasing from a high of over $127 per barrel in March or this year to around $90 today.”
In his address, Davis said, “The bottom line is that monthly bills will go up over the next several quarters, before they begin to come down, in 12 to 18 months.”