Fuel and Power Prices to Increase

By Stanford Conway

The Observer

Prime Minister (PM) Denzil Douglas said the Government could not continue to subsidise fuel at its current cost and plans were afoot to seek alternative energy sources.

The PM made this pronouncement last Tuesday afternoon during his monthly Press Conference with members of the media.

The PM said that the Government normally spend some EC$15 million annually on diesel and other associated products, but that amount had already been expended in the first half of the year and an additional EC$10 million had to be provided for the purchasing of petroleum for the remaining six months.

He added that in the interest of the nation, the Government had to provide the funds for the purchasing of petroleum products that the country must have in order to fuel the generating plants that provide electricity.

“Let me emphasise that the Government cannot continue to subsidise fuel in this way. I have been advised last week by the Ministry of Finance that for every gallon of petrol sold at the pump, the Government is subsidising by as much as six dollars.

“That has to come to an end. Obviously, this is going to ruin the country, it is going to ruin the Government and, so, very shortly we have to make the necessary adjustment to the prices so that this is not borne by the Government but by the people,” Douglas said.

He said the same would be done with regards to electricity, noting the energy charge, to date, was not passed on to the consumer.

“Government, at the moment, is selling its electricity at EC 45 cents per kilowatt hour. It is the lowest in the whole Caribbean region but the cost of diesel, which we have to use to generate that electricity, we are paying EC 45 cents for every kilowatt hour that is generated by that diesel.

“In other words, we are not even charging our consumers what it costs the Government to buy just diesel alone to run the generators. I said nothing about the maintenance cost of the generators…that does not include the capital recovery cost. Just take into consideration the basic infrastructure, the buildings, the maintenance and so forth; this has to be re-examined,” Douglas said.

The PM declared that in the near future he would request the Ministry of Finance to prepare the necessary submission to be brought before the Cabinet in order to have a second look at the situation.

He noted, from that backdrop, it was important for the Government to quickly get onboard with the PetroCaribe Initiative that was pursued by the Venezuelan Government.

Douglas intimated that because of the escalating cost of fuel, the Government was actively pursuing a number of initiatives with regards to alternative fuel sources, including windmills, hydro-thermal energy, energy from sugarcane, “Ethanol and other primary products we may have that can be utilised as a source and a form of energy.”

He further intimated that a team out of Cuba and assistance from Venezuela would soon be in the Federation to examine the potential of the lost sugar industry with regards to the production of ethanol.

The PM also said that plans were afoot to conduct a United Nations/ECLACT funded initial feasibility study in the tapping of water from the ocean to produce energy in running the country’s electricity generating plant.

“In fact, when I hopefully go to Japan next week, I have made the request to visit such a plant that I have seen as a model when I visited Mauritius in January to look at the environmental development programme; that initiative that we had asked for Small Island Developing States. And hopefully see that initiative and to what extent St. Kitts and Nevis can benefit from those researches that are taking place with regard to alternative energy,” said Douglas.

Douglas also used the opportunity to remind residents of the twin-island Federation about the conservation of energy.