JAMAICA Public Service (JPS) customers will be asked to pay more for their electricity this month — partly due to the recent increase in the Special Consumption tax (SCT) on heavy fuel oil (HFO), the light and power company advised yesterday.
The company said the spike is also due to an increase in the cost of the fuel used for electricity generation, caused by rising oil prices on the international market, and the continued devaluation of the Jamaican dollar.
“This is definitely not the best news for us at JPS, or for our customers,” JPS President and CEO Kelly Tomblin said in a release.
The Government last month introduced the $7 per litre increase as part of the revenue package to help finance its $580-billion 2015/16 Budget, but Finance Minister Audley Shaw, at the time, assured the panicking public that the tax would only apply to fuel at the pumps.
“This tax doesn’t apply to JPS at all. It is only related to SCT for fuel for road transport,” Shaw said at a post-budget press conference. The SCT is expected to yield $6.4 billion for the Government’s coffers.
In announcing the 12.8 per cent increase yesterday, the JPS urged consumers to “conserve on their electricity usage, as the upward trend in oil prices has resulted in an increase in the cost of electricity”.
“The overall increase will result in residential customers paying US$0.21 per kWh on average for electricity in June, compared to US$0.19 in May. This means that the average residential customer using 165kWh of electricity for the month, will see a $500 increase in his or her June bill, which will move from $3,875 in May to approximately $4,372 this month,” the JPS said.
The JPS president stressed that, despite the increase, electricity bills are still 20 per cent lower than they were in June 2015 when customers were paying US0.27 per kWh. The company argued that Jamaica continues to enjoy one of the lowest electricity rates in the region, behind Belize and Trinidad.
Reacting to the news, Private Sector Organisation of Jamaica (PSOJ) President William Mahfood reiterated that the sector had recognised from the outset that the imposition of the tax on the HFO and Liquefied Natural Gas (LNG) would have an incremental increase in the cost of electricity of five per cent.
“As far as the price of oil goes, this is a matter that is beyond our control (but) we still feel there should be some amount of hedge put in place to mitigate against future increases in the price of oil,” he remarked, noting that the sector is in full support of the phasing out of older power plants which rely on HFO and diesel.
He said that, while the phasing out of JPS’ 190-megawatt facility at Old Harbour will take a couple more years, eventually more plants will convert to LNG.
Mahfood said also that, like rising oil prices, the devaluation of the dollar against the US currency is out of Jamaica’s hands and can only be militated against by economic growth.