… says company’s operating expenses, fuel saving warrant move
By Michael Younge and Edward Layne
Opposition parliamentarian and economist Irfaan Ali says that the Guyana Power and Light (GPL) is in a better financial position to reduce the costs and tariffs for electricity by at least 30 per cent over the next few months which will result in huge savings for the taxpayers and the Private Sector.
Ali, speaking during an exclusive interview with Guyana Times on Thursday, maintained that both GPL and the Government were pocketing millions of dollars in savings as a result of the significant decline in the price for a barrel of oil and fuel generally on the world market since mid-last year.
He stated that a simple analysis of the situation would prove that the price for oil plummeted from between US$130-US$110 to US$30-US$20 per barrel of oil.
Ali, a former acting Industry and Commerce Minister under the People’s Progressive Party/Civic (PPP/C) Government, maintained that these slumping oil prices had no doubt positively affected the state of affairs at GPL and the Guyana Oil Company (Guyoil).
He argued that as a result of the drop in the price for oil internationally, GPL in particular would have seen a 40 per cent to 60 per cent reduction in its overall operating costs and expenses since the purchase and importation of oil accounted for a significant percentage of the previously high related costs.
“GPL, therefore, needs to reduce its overall tariffs and electricity costs in a comparative manner to the drop in the price for oil and local operating expenses,” Ali reasoned.
The economist said it was “unfortunate” that the company had not decided to do the right thing by the Guyanese public.
“I will continue to call for this 30 per cent decrease in the costs as I hold the view strongly that GPL and the Government are practising bad economics which will not see the lives of Guyanese further developed,” he remarked.
He said that were GPL to agree to even a 15 per cent decrease, the ordinary Guyanese would benefit significantly because the burden to pay their bills would be significantly reduced.
“There will also be spin-off effects for Guyana’s new and traditional manufacturing sectors as the operating expenses for fuel-dependent businesses would go down and production would soar,” he related.
Ali, who also worked for the Finance Ministry for a number of years and is versed in key macroeconomics fundamentals, said the economy would also be “stimulated” after receiving a much-needed impetus from the move.
The economist’s call is coming at a time when GPL’s overall technical and nontechnical loses are on the decline.
Meanwhile, former Junior Finance Minister Juan Edghill, in an invited comment, stated that a recent admission by Public Infrastructure Minister David Patterson that the cost of production of electricity was about 11 US cents to 12 US cents per Kilowatt/Hour (Kwh) in itself should cause GPL to make the necessary adjustment to the tariffs.
“If the price of fuel drops, then it is a legitimate expectation that GPL management and those in authority, including the Government and the Cabinet itself, would make the necessary adjustment,” Edghill stated.
Edghill called on the Government to move now to have the price for fuel at the pumps reduced to reflect the new realities on the world market.
“The Minister of Finance must act and must act now…the benefits of the reduction must be passed on to the people. It could be considered immoral and unethical for Government to be profiteering on the backs of the poor by passing on high prices at the pumps to Guyanese,” Edghill told Guyana Times.
The former Finance Minister questioned why the Government was so reluctant to make the adjustments so that the average Guyanese could enjoy the real benefits of record low fuel prices on the world market.
Edghill recalled that during the PPP/C Administration, the necessary adjustments were being made to the excise tax in order to ensure that the benefits of the tumbling world market prices reached the consumers.
However, in the case of the A Partnership for National Unity/Alliance For Change (APNU/AFC) coalition Government, benefits to the poor do not seem a priority.
Edghill continues to question why the Government continues to make huge profits on the backs of ordinary Guyanese and do nothing.
“It shows that the Government is insensitive, they’re unresponsive, they are uncaring and all they are interested in is getting money so they could go on with their merry spending spree,” he stated.
When contacted for a comment on the matter via his mobile, Minister Patterson declined, saying “you could write whatever you like… I always have a no comment for you”.
Minister Patterson went on to instruct this newspaper to write his secretary for any replies that may be needed.
He has been one of the most uncooperative members of the Granger Cabinet especially with respect to divulging reliable information about the entities and their activities which fall under his portfolio despite the continued admonition of President David Granger that his Government must be open and transparent as well as answerable to the media and populace.