NASSAU, BAHAMAS — Minister of Works & Utilities Alfred Sears said the government will subsidize Bahamas Power & Light rather than let the company increase the fuel surcharge.
BPL’s CEO Shevonn Cambridge recently said the company will increase its fuel surcharge in the next month or two.
Sears, during the press briefing at the Office of the Prime Minister yesterday, said this will not happen because the government is committed to not burdening residents.
“With respect to BPL, BPL cannot absorb increases so there are only two options,” he said. “One is to pass it on to the consumer or for the government to provide a subvention to pay and the prime minister has made it very clear that the government is committed to providing a measure of safeguard for the consumer given the fact that in many homes people’s lives have been disrupted through unemployment, through death, through illness as a result of the pandemic.
“We still have a lot of climate refugees in our country, people who were displaced by Hurricane Dorian. In my own family, I have about fifty family members, nieces and nephews, and brother and sister who have been impacted in Grand Bahama and Abaco and have not been able to get back to where they were in 2019 and my experience is not unique.
“This is a reality within our country. It’s one thing when you stay here in Nassau but as you travel throughout this country you will see that people’s lives have been upended especially in Grand Bahama.”
To deal with the pressure of escalating fuel costs, the Davis administration has been pushing the United States to remove sanctions on Venezuela.
Prime Minister Philip Davis said last week there has been progress on the matter.
He said: “We have made strong representations with the US to lift the sanctions in respect to that and we hope to see that move very soon.
“So, if our efforts to remove the other pressures that feed into increasing the cost of fuel, if those are released as we expect them to, then there may not be a need for us to consider raising any further bills on the backs of Bahamians.
Sears emphasized the geopolitical events that have led to the increase in the price of fuel, namely the Russian-Ukrainian conflict.
“The second consideration is that in 2020 BPL formed four hedging contracts,” he said. “Those hedging contracts were formed at a time when petroleum prices were fairly stable and they were intended to insulate The Bahamas, BPL, from a certain level of volatility in the price of fuel.
“At that time, it was not anticipated that there would have been a war in Ukraine and also that there would have been sanctions imposed on Russia which is a major supplier for the European market and other markets throughout the world.
He continued: “The hedge and the last contract will expire in 2024 so while we still have a hedge, it does not cover the full scope of the increases that have occurred and whenever you have a situation like this and the prime minister has made it very clear that the government has a commitment in law under the Electricity Act as well as the clear policy of the government is whatever happens to protect the vulnerable segments of the Bahamian society.
“It means therefore that what the hedge does not cover, the government will have to pay. In fact, the government is the backstop for the hedge, and therefore to fulfill the statutory obligation of protecting vulnerable consumers and that means the residential consumers the government really has to provide the backstop.
Sears added: “The prime minister as the Minister of Finance for the Commonwealth of the Bahamas has made it abundantly clear that the government is committed to providing a level of state protection for vulnerable consumers in the Commonwealth of the Bahamas.”
