Head of the Presidential Secretariat (HPS) Dr. Roger Luncheon says that the Guyana Power and Light (GPL) may have to apply for a tariff increase as a result of not getting a $1 billion in subsidies which was intended to cushion fuel costs.
The opposition, in a vote in the National Assembly on Wednesday, lopped off $1 billion out of a package of $6 billion meant to help the company cope with high fuel prices without resorting to tariff increases.
Speaking at his post-Cabinet press briefing held at the Office of the President yesterday, the HPS said that the subsidy being removed from Linden will equate to $1 billion, leaving a reduced subsidy of about $2 billion.
Further, Dr Luncheon justified the decision by the Cabinet to remove part of the subsidy for Linden’s electricity supply and chided persons from the mining town for being wasteful in their consumption.
“Cabinet, as outlined in the submission of the estimates, was prepared and committed to have the subsidy retained but at a lesser value – from practically $3 billion in Region Ten, the subsidy will be decreased by $1 billion,” he said.
“The estimate of expenditure and revenue expressed government’s resolve in changing the subsidy but at a lesser value…$1 billion less,” he explained.
“That means that the tariff would go up but not to eliminate the subsidy,” said Dr. Luncheon. “Had the subsidy been reduced to zero then [Lindeners] would have had to pay the identical tariff those of us on the coast are paying for electricity,” he said. “The rates would go up but to nowhere close to what the others are paying,” he stressed.
“In the assumption that these tariff rates and the increase in tariff rates even in the presence of the subsidy would need some responsible response by them insofar as electricity consumption is concerned,” he said. Dr. Luncheon added that the fixed charge will still not be imposed on Lindeners.
He said that in Region Ten there are two tariff rates only: Residential and Business. “This of course is quite different to the rest of us on the grid where residential has been broken down into two groups and there is a differentiation between business, commercial and industrial. Those grid tariffs are present everywhere else other than in Region Ten,” he said.
Cabinet also decided that fixed charges will not be imposed in Linden. This, he said, ranges from between $300 monthly for residential and $128,000 for the big industrial customers. This is paid in addition to consumption, he noted.
“So the $53 per kilowatt hour is not what is being imposed on Linden. The $1 billion proposal for subsidies would see the rate going up to about 50 percent of the rate in the rest of the grid – $24 to $26 per kilowatt hour.
For the commercial and business, they currently pay $12 to $15 per Kwh, the rest of the grid at the lowest level in the commercial pays $53 per Kwh,” he said.
“Conservation is one expected response. The records will show that cheap power has led to a pattern of use of power representing waste,” Dr. Luncheon said.