September 28, 2016

PSC, GMSA see no need for reduction

Electricity tariffs

By Edward Layne

Days after Opposition legislator Irfaan Ali called for a 30 per cent reduction in the electricity tariffs, the Private Sector Commission (PSC) and the Guyana Manufacturing and Services Association (GMSA) says they see no need for a reduction at this time.

PSC Chairman Norman McLean

PSC Chairman Norman McLean

Opposition Economist Irfaan Ali

Opposition Economist Irfaan Ali

Ali, speaking during an exclusive interview with Guyana Times on Thursday, maintained that both the Guyana Power and Light inc (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-2015.
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 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 40-60 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.
But, Chairman of the PSC, Major General (Ret’d) Norman McLean, who also heads the GMSA, told Guyana Times on Saturday that due to the volatility of the world market prices for fuel, which has been fluctuating, a tariff cut is not possible.
Speaking directly to Ali’s call for a 30 per cent reduction in the tariffs, McLean noted that such is not possible.
“I don’t think it’s feasible,” he declared. He also said that a similar situation obtains with regards to fuel prices at local pumps.
Efforts to contact Finance Minister Winston Jordan for a comment on the issue proved futile, as multiple calls to his mobile went unanswered.
Opposition Leader Bharrat Jagdeo had expressed concern in late January that the Guyana Oil Company (Guyoil) and GPL were cashing in on mega profits worth over US$200 million collectively, as a result of purchasing extremely cheaper fuel between the years 2014 to 2015, while the ordinary citizens continued to bear the brunt of exorbitant prices for fuel and electricity.
Jagdeo had contended that with the plummeting oil prices on the world market, electricity prices should have tumbled already.
Moreover, the Opposition Leader explained that those reductions could have been a huge stimulus to the economy. “The consumers would have more disposable income. Secondly, if we allowed the prices to be adjusted, we would have given a big stimulus to the business community, miners, manufacturers, etc,” he stated.
Guyana imports approximately 10,000 barrels of oil daily.

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