10 percent “compromise” electricity tariff hike likely- govt sources

Last Updated on Saturday, 26 December 2015, 21:01 by GxMedia

Government is considering increasing electricity tariffs by about 10 percent, rather than the 26.7 percent hike that Guyana Power and Light (GPL) wants to compensate for the multi-billion dollar budget cut, according to top government sources.

The estimated 10 percent hike is being regarded as a “compromise” to give the power company some of the much needed revenue, while yielding to demands by the private sector and trade unions that the GPL’s proposed hike should not be instituted. GPL has cited the need for the cash to fund its capital programme and cope with rising fuel prices.

For the opposition Alliance For Change (AFC) and A Partnership for National Unity (APNU), they first want the power company to be efficiently managed and previous subsidies properly accounted for before they could approve all or part of the GUY$5.2 billion that they have cut from the 2013 national budget.

Sacking of GPL’s board of directors, including its chairman, and the Chief Executive Officer are among several demands on grounds that the power company is being rewarded for poor management.

The company continues to be saddled with high technical and commercial losses, even as it spends of millions of dollars on upgrading its transmission and distribution network. Theft of electricity, especially in depressed communities, continues to be a major bugbear.

The Private Sector Commission (PSC), worried that a huge rate hike could spell doom for the manufacturing and other business sectors, has offered to mediate among GPL, government and the political opposition to have the subsidy restored. The AFC has warmly welcomed the PSC’s offer while APNU has rejected it, saying it is competent to interface with government.

The business organisation has said that an increase in electricity rates would erase income tax relief and the gains in fixing the minimum wage at GUY$35,000.

The pro-government Federation of Independent Trade Unions of Guyana (FITUG) has said that its call for restoration of the subsidy would see all workers regardless of their political persuasion benefitting from low rates.