Govt rules out drop in electricity tariffs, despite decline in fuel prices

Last Updated on Friday, 23 January 2015, 20:56 by GxMedia

Government on Friday ruled out a drop in electricity rates by the state-owned Guyana Power and Light Inc. (GPL) , saying that already consumers are benefitting from a huge subsidy.

“The actual cost of production of electricity that is borne by consumers really does not have that much to do with the cost of fuel precisely because of the subsidy that the government provides,” he said.

Head of the Presidential Secretariat, Dr Roger Luncheon also noted that while the average 30 percent drop in prices for gasoline, kerosene and diesel was expected to trickle down to consumers, the prices for aviation gas and cooking gas would be determined by market forces.

Asked whether electricity consumers could expect a reduction in tariffs, he observed that if there was a “flow through” from the price of fuel to the cost of electricity, “tariffs would be off the map (astronomical).”

Government in 2014 waived GUY$30,000 per year each on the electricity bills for 10,480 pensioners.  

The administration last year allocated GUY$3.7 billion to GPL to cushion the impact of a 12 percent increase in tariffs on consumers. The power company has more than 170,000 consumers.

Another GUT$3.2 billion was set aside to subsidize electricity to consumers in Linden where there had been violent protests several years ago due to government’s attempts to reduce the financial support.