Private Sector businesses want lower electricity tariff following decline in world market fuel price

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By Tracey Khan – Drakes

Minister Ali addressing the gathering.
Minister Ali addressing the gathering.

[www.inewsguyana.com] –Members of the business community in Guyana have called on government to put systems in place to bring them relief from the Guyana Power & Light Inc. (GPL), citing huge electricity bills they are made to pay, which in some cases represent up to 20% of their business costs.

Business operators believe that since fuel on the world market is at a steady decline and a number of Caribbean countries are befitting from many fuel driven sectors, Guyanese operators in the Private sector should be afforded the same.

This call was made on Friday, January 16 during the first ever Guyana – Suriname Trade Mission being held at the Guyana National Conference Center in Liliendaal, East Coast Demerara.

Business operators cited the high electricity cost as a major challenge for their operations, making them less competitive. However, Tourism Minister (ag) Irfaan Ali explained that it would be unrealistic for government to make adjustments with the world market price with fuel since it is a, “very volatile” market.

“The GPL has been subsiding for the last few decades the cost of electricity…the price of fuel has fallen for a few months now and there is indeed the interesting call for the review of tariff. If we take this very immediate approach to this issue of tariffs, it can have dangerous effects for policy formulation, then you’re saying to me that if in six months it rises back up to a substantial level then we too must increase the price,” Ali said.

He argued that GPL’s electricity cost has never been linked to the movement of fuel.

“It has always been subsidized and whilst there is continuous review of the matter, we have to appreciate the fact that decades of subsides cannot be corrected with a few months of falling prices. It is going to be in any Government’s favor to immediately act on conditions such as those because it would bring great popularity but you have to balance popularity with reality.”

Chairman of Trade & Investment of the Private Sector Commission (PSC) Ramesh Dookhoo did not seem satisfied with Ali’s justification questioned how the Private Sector will remain competitive with other Caribbean markets that are benefiting from the reduction.

“What I would urge Minister Ali to consider seriously from a non-financial perspective is the competitiveness of our own companies relative to the rest of the Caribbean because if we can in six months come to a place where we are still paying a high price for energy and fuel in Guyana and our friends around us including Suriname are befitting from the world market prices, that’s another problem,” Dookhoo reasoned.

In response, Ali, in pointing out that the falling oil prices should also benefit the consumers of the private sector, questioned why reductions have not been made to other commodities that are imported by the Private sector.

“I have not seen a drop in international price for Coco Cola as yet, nor Pepsi nor many international brands that is controlled by the Private Sector. There must be a reason behind this…the end in dropping these prices is the consumer so the Private Sector would also have a great responsibility and role in passing down benefits of a reduction to the consumers,” Minister Ali said.

The Minister subsequently conceded that the issue is one that merits further dialogue and consideration and committed to this process on government’s behalf.

 

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