Cooking with natural gas is about to become more expensive for Barbadians, who are being told to expect a price increase.
Minister of Industry and Commerce Donville Inniss Wednesday announced that the Ministry of Finance and the Ministry of Energy were in the final stages of discussions on an increase in natural gas rates, something Inniss said he wholeheartedly supported.
However, he could not say how soon customers were expected to begin paying more, or how much more they would be asked to fork out.
Barbados TODAY was unable to ascertain the cost to Government of producing this form of energy, which is provided through the National Petroleum Corporation (NPC). However, according to the company’s website, it costs just over $300 to get the fuel to homes – a $117 fee for installation from the main to the metre, a $50 application fee, and an internal/in-house installation fee starting at $137.93.
Natural gas is currently available in parts of eight parishes to just over 16,000 householders, as well as several commercial entities, with some residents paying as little as $12 a month.
The monthly rate schedule consists of a consumption charge of $1.48 per cubic metre, a fixed charge of $3.00 per month for each domestic meter, and 17.5 per cent Value Added Tax on the bill. A ten per cent discount is given if the bill is settled within 15 days of the billing date.
Inniss said there was a need to bring those rates “in line more with reality”, adding that some of his St James South constituents had been wanting natural gas for years, but the cost to the NPC to accommodate them was “beyond their current scope”.
“That is the reality that they face. When you look at it, there has not been any increase in natural gas prices in Barbados now for 20 years on the residential side and about ten years on the commercial side. Yet still, we expect the NPC and those bodies to do more. It is not practical. I would safely say, based on all that I have seen and is aware of, that the matter is very much under active consideration and I expect that there will be an increase in natural gas prices, and I fully support it. It is long overdue and it is one way in which we will be able to provide natural gas to more consumers,” the minister told the official opening of the Rubis service station at Fontabelle, St Michael.
A natural gas shortage around Christmas of 2014 had affected businesses on the west coast – and later on the south coast – particularly hotels and restaurants, prompting calls by the NPC for industrial users to switch to alternative fuels for the short term, while government had announced a S$7 million initiative aimed at bringing relief to the businesses.
Inniss today said there continued to be a supply constraint, therefore “necessary adjustment in prices” was “only fair and reasonably fitting”.
“It is a cheap form of energy. But the harsh reality is that we have challenges with quantity and supply, plus the cost at which it is being delivered now to commercial enterprises and residents is not at the level that affords the National Petroleum Corporation to be a viable entity and to be able to expand.”
In a swift response, Director General of the Barbados Consumer Research Association Malcolm Gibbs-Taitt told Barbados TODAY he was opposed to an increase unless Government was willing to also to give public servants a pay rise.
Gibbs-Taitt said a price hike made no sense if wages remained stagnant.
“The Government from time to time will tell you it cannot afford increases in wages for public workers, but if the same Government will agree for the increase in prices of gas for example, I would suggest that the atmosphere is right for salary increases,” the consumer rights advocate said.
“The people who receive salaries and wages are the people who buy these things . . . I am opposed to any price increases of anything, especially if it is led by Government. I definitely oppose to it unless they are going to give some across-the-board wage and salary increase to people,” he added.