Latest update April 18th, 2025 8:12 AM
Despite falling oil prices, GPL unlikely to drop tariffs
By Leonard Gildarie
Despite the fact that world oil prices continue to plummet, it is unlikely that the Guyana Power and Light
Minister David Patterson
Inc. (GPL) will drop its tariffs anytime soon.
As of yesterday, prices remained under US$40 per barrel on the world market with analysts predicting no significant rise within the first quarter of 2016.
For GPL, last year’s prices fell from over US$131 per barrel of light fuel oil to US$87 while heavy fuel oil from US$86 in 2014 to US$50. In total, fuel costs halved from $20B in 2014 to $10.9B, not an insignificant amount.
On Thursday, Minister of Public Infrastructure David Patterson, who is charged with responsibility for the energy sector was questioned about the possibilities of a tariff drop, and he stated that this was unlikely.
The minister was at the time, along with heads of the agencies under his watch, briefing the media about performances over the past year.
Patterson and the Ministry of Finance have been examining GPL’s accounts for the past year.
He noted that in 2015, Government did not plug in any cash bailouts to GPL to offset losses from high fuel in previous years.
The company is badly in need of equipment, likely to cost upwards of $7.5B. (approx. US$37.5M), and it is the plan to invest in these, the Minister disclosed.
It is unlikely also that Government this year will also announce any cash help for the power company, which now boasts over 181,000 customers across the coastland, as revenue from the lower fuel prices on the world market has helped the finances. Rather, the internal revenues of GPL will be used to buy the equipment.
GPL will be using fuel savings from lower world prices to buy much needed equipment, Govt. says.
According to Minister Patterson, it would have been irresponsible to lower tariffs and when prices go up for fuel for GPL to come for a bailout.
He also said that GPL has not made a windfall from the fuel savings as it was a loss-making entity of the state.
GPL’s revenues last year rose to $32.5B from $31.7B in 2014.
In 2015, the number of customers for prepaid meters moved from 46,869 to 49,004.
It appears that consumption of power went up too, with GPL recording 522,944 megawatt hours as against 493,592 from 2014.
With a US$36M new power plant at Vreed-en-Hoop, West Bank Demerara, in operations just over a year ago, GPL is sitting comfortable for now with excess power to spare.
A number of multi-billion-dollar projects are underway to improve efficiency with the changing of transformers and new metering technology.
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