The Barbados government has confirmed that the country’s leading electricity company will be increasing its monthly fuel charge in response to rising fuel costs, with the rate increase set to be reflected in consumers’ electricity bills beginning in November.
But Prime Minister Phillip Davis said the increases will only be temporary and are expected to come down over the next 12 to 18 months.
“For a large majority of BPL (Bahamas Power and Light) customers, who consume less than 800 kWh (kilowatt hours), the fuel charge is increasing by two cents per kWh, which will result in an increase this quarter of less than US$20 per month. If your current monthly bill is US$182 or less, you fall in this category,” he said.
“For those who consume more than 800 kWh, the increase will be 4.3 cents per kWh. I want to note here that we will raise the VAT ceiling from US$300 to US$400, so in the future, no VAT will be due on any electricity bills under US$400, which will take some of the stings out of the 4.3 cent increase for a great many BPL consumers subject to the larger increase.”
In February, BPL announced plans to increase customers’ fuel charges, but the company later recalled the statement with the government describing the announcement as premature and ultimately denying the company approval for the increase.
Works and Utilities Minister Alfred Sears later said that BPL would have no choice but to pass on increased fuel costs to its customers through higher electricity bills unless the government provided a subsidy to the company, which it eventually did, given surging fuel costs globally.
Prime Minister Davis addressing the government’s decision to delay the increase of electricity bills, said it was because of the economic hardship being experienced by Bahamians following the coronavirus (COVID-19) impact and, most recently, the inflationary cost of living.
“On top of that, in February, the Russian-Ukrainian war began, disrupting global trade and raising oil and gas prices sharply,” he said, adding he wanted to see stronger economic growth and more Bahamians working before giving the power company the green light to raise electricity bills.
BPL said the price increases would be gradually phased in from October 1 to November 30, 2022; December 1, 2022, to February 28, 2023; March 1 to May 2023; June 1 to August 31, 2023, and September 1 to November 30, 2023.
“During each phase of the implementation, customers can expect an increase of two cents per kWh up to 800kWh and 4.3 cents for all units over 800kWh,” BPL said in a statement.
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