Pending rise in electricity rates unavoidable – Paulwell

WESTERN BUREAU:

Opposition Shadow Minister of Mining and Energy Phillip Paulwell has said any plans by the Jamaica Public Service Company (JPS) to increase the cost of light bills at this time is unavoidable.

However, Paulwell, who was a part of the People’s National Party (PNP) administration in 2015 that established a special consumption tax of $7.00 on fuel, said the Andrew Holness-led Government has the power to cushion, in a realistic way, the impact of the sharp increases in oil and energy.

He warned that with oil prices now soaring due to Russia’s invasion of Ukraine, it is quite likely that the price of oil is going to reach well over US$150 per barrel soon.

“The fact is fuel, by their licence and by the regulations, is a ‘pass through’ from JPS to their customers, so I don’t think that can be prevented, but the Government can act to reduce the GCT component and some of the tax element in the fuel so that it can become less burdensome,” Paulwell said.

“It is absolutely necessary that a strong signal be sent to the Jamaican consumer that there is a high level of care on the part of the Government, because we are going to reach that breaking point where people can’t take it anymore,” the Opposition energy spokesman warned.

He was responding to questions from The Gleaner over a statement by JPS in which it expressed concern for its vulnerable customers in the face of increasing fuel prices on the world market.

The country’s light and power company, in a media release last week, threatened to increase its prices on the basis of rising oil costs. JPS has also called for a national response to the global crisis even as it warned that the rising fuel prices will affect its customers.

“The war in Ukraine means fuel is much more expensive and there is less of it,” explained JPS’ chief financial officer, Vernon Douglas, in the statement to the media.

“The prices of both oil and natural gas have increased since last year. They will increase much more now. A higher fuel cost means higher electricity costs. We have to pay more to the fuel suppliers. We have no choice. Fuel makes up about half of customers’ electricity bills, so the changes from one month to the next can be quite significant,” he said.