The Barbados Consumer Empowerment Network (BCEN) has urged the government to implement sustainable solutions to address high electricity costs, following the announcement of a six-month extension to the electricity bill relief programme.
Minister in the Ministry of Finance Ryan Straughn announced in the House of Assembly on Monday, the day the measure expired, that the VAT reduction on electricity bills would be extended to March 31, 2025. Residential customers will therefore continue to pay a 7.5 per cent VAT rate, instead of the usual 15 per cent, on the first 250 kilowatt hours of electricity.
While welcoming the temporary measure, the consumer advocacy group stressed that more comprehensive reforms were needed to tackle the root causes of rising utility prices and overall affordability in Barbados.
“Unequivocally, BCEN believes that consumers need more than temporary relief. Sustainable, long-term solutions that offer consumers relief from escalating costs of utilities and essential services [are] equally necessary,” the organisation said.
The group acknowledged the government’s efforts to ease financial pressures on households during a period of economic uncertainty and increasing living costs. But BCEN cautioned against relying solely on short-term fixes for what it views as a much larger issue impacting Barbadians.
Responding to comments made by both the Barbados Light and Power Company and the government regarding “a pound wise and a penny foolish” approach to affordable electricity access, BCEN countered: “Quite frankly, everything is not financially rosy in Barbados. If consumers were in sound economic positions, then the phrase ‘a pound wise and a penny foolish’ would have had greater merit.”
The consumer body highlighted the immediate concerns of Barbadians: “Consumers are now more concerned today about how their incomes will stretch to meet rising costs in the short term, but still are not ignoring long-term benefits.”
BCEN warned of potential consequences once the relief period ends.
“The six months’ relief will temporarily help households and businesses, but after the six months (unless something miraculous happens), Barbados will be faced with an acute bout of energy inflation which in some cases will lead to energy poverty,” it said.
In light of these concerns, BCEN has called on the government to take specific actions during the extended relief period. These include improving transparency and communication, identifying and accelerating renewable energy initiatives, expanding energy efficiency programmes, and reviewing the electricity rate structure. (EJ)
