Foreigners cannot be excluded from benefits of subsidies to GPL-Jagdeo

Oct 01, 2024 News

Kaieteur News – The Government of Guyana has been heavily subsidising the Guyana Power and Light (GPL) and it claims that the efforts are to prevent a raise in the light bills of citizens.  Guyana’s booming oil industry has attracted a range of foreign companies coming into the country and setting up shop and at the same time driving up electricity demand.   Despite this, Vice President Bharrat Jagdeo told reporters last Thursday that they cannot be excluded from the benefits being derived from the government subsidies to GPL.

Vice President Bharrat Jagdeo.

At his weekly news conference last week, this news asked the Vice President why foreign companies operating here are not made to pay the unsubsidised electricity charges as they are in most cases the biggest consumers of electricity. Jagdeo responded saying: “We can have people come and say we will charge two electricity rates, now one for Guyanese and one for foreigners and the foreigners must come and bring a document every week and show whether they are foreigners or not or every Guyanese will have to then prove that they are Guyanese and prove that they are Guyanese to benefit from the electricity subsidy.”

Labeling the separation of rates an administrative nightmare, he said the foreigners will very well put the meters in the names of Guyanese citizens to be able to enjoy the rates, adding that targeted subsidies are a nightmare. Jagdeo to let his point hit home took the reporter on a history trip back to the time when old age pension was awarded based on a “means test”. Back then, the less you earned the better your chances were of getting the pension and the monthly earnings in the 90’s was about $16.” “We abolished the mean test so if you reach 65, you get the old age pension. Some of the rich people will get it too but it is administratively easier to do that and you don’t have the corruption,” Jagdeo stated.

On May 27^th 2024, this publication reported that for the past five years, the cost of fuel has increased significantly with some $49.151 billion to be spent by the Guyana Power and Light (GPL) to purchase fuel for its operations. This information was taken from GPL Performance Statistics. The document stated that some 1,354,700 barrels of Heavy Fuel Oil (HFO) and Light Fuel Oil (LFO) were purchased by the state entity to the tune of $16.171 billion.

With increases recorded annually since then, it was stated that this year, GPL will purchase 2,191,585 of barrels of HFO and LFO, at the cost of $49.151 billion (US$228.34 million). The weighted average fuel price per barrel is US$104.19 – the document states.

In 2022, GPL had announced that the steady rise in fuel prices is negatively affecting its operations. In fact, it was stated that if the trend continues, generating costs are expected to trump revenue earnings.

In June of this year, the VP had told reporters that he was informed that there is a need for US$66M as what the GPL budgeted for did not cater for the fuel price increases. “But we are not increasing the price of electricity in another country, they would have increased the price of electricity. So that means before the end of the year, we’ll go to Parliament for a supplementary of US$66M for just subsidizing electricity,” he added.

The VP boasted that the government has absorbed the price increases that should have come from electricity since the price of fuel has gone up. “So the price of fuel went up from $70 dollars that we were budgeting; now, we are paying one $105 maybe $110 per barrel. We have to go to the parliament for the recess because of just fuel prices.”

In April, the government, through GPL, signed a multi-million-dollar contract with Urbacon Concessions Investments, W.L.L (UCI), a subsidiary of UCC Holdings in Qatar, in collaboration with Karpowership International to rent the ship for two years. The floating power plant arrived in Georgetown in May and was docked at Everton, East Bank Berbice in Region Six, and eventually connected to the Demerara-Berbice Interconnected System (DBIS). The government procured the services of the energy vessel to bring relief to citizens since there has been an increase in electricity demand, which led to shortfalls and constant power outages across the country.

Tags: Jagdeo, GPL, foreigners, subsidies, power

• concessions, generating, Guyanese, Karpowership, the government, Urbacon, Vice President Bharrat Jagdeo