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Prime Minister Ralph Gonsalves in an April 28, 2022 file photo.
Prime Minister Ralph Gonsalves in an April 28, 2022 file photo.
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The government of St. Vincent and the Grenadines, on Monday, took emergency steps to prevent the fuel surcharge on electricity bills from surpassing the record high of 67 cents per unit in 2008.

Prime Minister Ralph Gonsalves said he had given instructions “so that we can keep the bill which is coming out tomorrow (Tuesday) in some reasonable frame”.

The fuel surcharge this month has jumped from 58 cents per kilowatt hour to 72.5 cents per unit, an increase of  14 cents per unit.

The prime minister was reporting, on radio, on an emergency meeting with the Director General of Finance and Planning, as well as Chair of the Board of VINLEC, Rene Baptiste, and acting chief executive of VINLEC, Vaughn Lewis.

“The bill is going to go up,” Gonsalves said, adding that the government will pay half of the increase.

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“I’m trying to shield the people as much as possible from the burden because this is a poor people’s government. This is a working people’s government,” Gonsalves said on WE FM’s Shake-up.

“The highest that it has ever been is in 2008 when it was 67 cents, approximately, per unit per kilowatt hour, the fuel surcharge,” he said, noting that back then, unrefined diesel  sold for US$147.50 a barrel. 

“Now this would have taken it higher,” he said, adding that he called CEO of VINLEC, Thornley Myers, who is in Canada, and Minister of Finance Camillo Gonsalves, who is attending the annual Caribbean Development Bank meeting in Turks and Caicos. 

“I also called yesterday (Sunday) the Director General of Finance and Planning as we had to do something,” Gonsalves said.

“Basically, what we are going to do, we are going to split the 14 cents. Let the consumer pay seven and we pay seven,” he said, adding that this will benefit VINLEC’s 47,000 consumers, including close to 42,000 domestic consumers.

“We will keep it below what the highest point has ever been. But still it will increase. VINLEC will absorb about $500,000 of that. And the government will put a number close to $300,000,” the prime minister said. 

“If this has to be repeated next month, we’ll have to probably reduce the way that formula is between the government and VINLEC.

“It’s a difficult period. And, as always, I have to come to the people and be very honest. If we were to absorb all of it, it will cost us about $1.6 million and when you take into account that we are already doing over a million dollars a month in providing the subsidy on the gasoline [and diesel] at the pump…”

Gonsalves said that a consumer who pays EC$135 would see an increase slightly less than $10, about half of what it would have been had it not been for his government’s intervention. 

He said that it did not make sense to remove value added tax on electricity “because if I do that, half the people who are poor people not paying the VAT in any case already because they consume less than 150 units a month… So I could do something which will help them.”

He anticipated criticism about why the subsidy was being extended to commercial consumers.

“But if I didn’t give the businesses the relief, they were going to pass it on. In any case, there are some mom and pop shops, which are really small people, own-account people who don’t have a domestic meter, but a commercial … Those are people at the margins too. I have to help them.” 

He said that with the rains beginning to return, hopefully hydro-electricity generation would increase rapidly and help to contain the fuel surcharge. 

The prime minister further said that he is in conversation with Venezuela regarding how soon PetroCaribe would resume, but noted the sanctions imposed by the United States. 

“So there are some logistics which have to be worked out because we have to make sure we don’t run afoul of these unilateral sanctions the United States of America has put on Venezuela…”

He said while the sanctions are intended to put pressure on Venezuela, Washington recently sent a delegation to Caracas to discuss sourcing fuel.

4 replies on “Gov’t averts record-high fuel surcharge this month — PM”

  1. MR PM Please go home in peace am begging. You said you going to pay 7% of the 14%which means we will be paying 65% .So just 2% less than 2008 and an increase of 7% from last month. MR PM tell me were is the help. You still paying vat. So why didn’t you remove the vat and bring it to 49%.Again MR PM you are showing people how much you are out of touch with them and your ability to govern is no longer in the interest of people rich or poor your age and your health looks like it is having a serious impact on your ability to govern.So please go home l beg you again.

  2. Deryck smart says:

    Reading this ,it sounds as if you are not work for the country ,with this ,I and we , it sounds like we are your subject and you are our master, it nah sounds good come again.

  3. Agustas Carr says:

    Why not construct more hydro electric power plant? Couldn’t the Yamboo Gorge accommodate a hydro electric dam?

  4. Cutbut Fartin says:

    As if Ralph can do anything about the economy. As far as economics are concerned he is as dum as hé is dunce.

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