BL&P: Global oil price increase driving higher electricity fuel costs
Rising global oil prices are pushing up the fuel component of electricity bills in Barbados, according to a statement issued by the Barbados Light & Power Company Ltd. (BL&P).
The company said it is closely monitoring developments in international oil markets as ongoing conflict and global instability continue to affect the cost of fuel, transportation and other essential services.
Because Barbados relies heavily on imported fuel to generate electricity, those changes are now being felt locally. BL&P noted that about 80 per cent of the island’s electricity is produced using fuel purchased on the international market, meaning fluctuations in global oil prices are reflected in the fuel portion of customers’ electricity bills.
The company pointed to recent movements in the price of West Texas Intermediate (WTI) crude oil, which climbed from about US$64 per barrel last month to significantly higher levels earlier this week before easing to around US$87 per barrel.
Those changes are being reflected in the Fuel Clause Adjustment (FCA), a component of electricity bills that represents the cost of fuel used in power generation. The FCA increased from 28.9949 cents per kilowatt hour in February to 35.8256 cents per kilowatt hour in March.
According to BL&P, the March adjustment was calculated when WTI prices were about US$75 per barrel. Based on that rate, an average household using 250 kilowatt hours of electricity could see an increase of roughly $17 on their bill for the month.
Johann Greaves, Vice President of Operations at Light & Power, acknowledged the pressure the increase may place on households and businesses.
“We understand that many households and businesses are already managing higher costs, and any change in electricity bills adds to that pressure,” he said. “With global oil prices remaining volatile, we know these changes are challenging.”
Greaves added that the company remains committed to monitoring global conditions and keeping customers informed so they can plan during the period of uncertainty.
BL&P also indicated that while global energy prices remain outside of its control, it continues to support national efforts to diversify Barbados’ energy mix and reduce long-term dependence on imported fuel.
In the meantime, the company suggested that customers may be able to reduce the impact of higher electricity costs by making small adjustments to their energy use, particularly when it comes to high-consumption appliances. (PR)
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