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This “eventuality” was fully and properly ventilated during the budget debate in the National Assembly, but the Opposition is now claiming otherwise, “claiming unconvincingly, both to Cabinet and to major stakeholders,” he asserted.
Luncheon said, understandably, GPL’s customers are deeply concerned about the proposed increases and the Administration’s intention is to undo the budget cuts and mitigate their impact.
“The urgency is obvious,” he acknowledged.
Civil society entities have expressed their concerns and sought audience with officials in the Administration and the authorities, in turn, are engaging the Opposition in seeking a quick resolution of this matter, Luncheon mentioned.
He, however, noted that this issue goes beyond GPL’s customers. For instance, public officers have not yet been paid for the month of May and each day presents financial woes to them and their families.
NO ADJUSTMENT
Meanwhile, Prime Minister Samuel Hinds, a few days ago, called on Guyanese to view the tariff increase proposed as one that is coming after five years of no adjustment, during which time oil prices had risen by about 60 percent.
The cost of oil constitutes about 80 percent of the requirement for providing electricity and the utility company has been facing dire financial constraints over the past few years as a result of high technical and commercial losses.
This position has been compounded by the Opposition slashing its $5.2 billion subsidy during consideration of the 2013 National Budget.
As such, the GPL has made the proposal to institute a 26.7 percent tariff hike, which has been submitted to the Public Utilities Commission (PUC) for approval.
The new charges have not yet taken effect but the GPL Board is actively engaged in planning for their implementation.
At present, the average price per kilowatt hour is $63 but, if the GPL proposition is approved, the new charge will be about $80 per kilowatt hour.
The prime minister, who has responsibility for the electricity sector, has said that GPL has been foregoing the increase in tariffs that it ought to have been charging, resulting in a calculated loss of $20 billion foregone income.
Hinds said, while this rise will be very demanding on people, the adjustment should have been coming in smaller steps of about five percent per annum.
He agreed the 26.7 percent is a big step but pointed out that it comes after five years of no increases and five years of greatly increased costs, especially for oil.
Hinds said the alternative, in future, is for an annual review to be put into effect, in which case one would probably see increases of no more than five percent per year.
UNCONSCIONABLE
Finance Minister Dr. Ashni Singh told reporters, earlier this week, that there can be no word but “unconscionable” to describe the imposition of the budgetary cuts by the Opposition because, according to him, no right-minded Guyanese would question the need for investment in electricity in Guyana.
The minister pointed out that electricity tariffs have not increased since 2007, even though the price of fuel has since gone up. He added that GPL has carried this increased cost without passing it on to its consumers, and noted that GPL was, therefore, in financial distress even before the cut to the subsidy was imposed, but the cut exacerbated the situation.
Dr Singh said that whilst it is unwelcome news, it should not be surprising that GPL now finds itself in a situation where its finances cannot sustain its operations without increasing tariffs.
He said he hopes the Opposition is taking notice of the implications being faced by the Guyanese people because of the budget cuts, especially since Leader of the Opposition, David Granger, was quoted in a local newspaper on Monday as saying that no impact has been felt yet from the cuts.
With regard to asking for a supplementary provision in the National Assembly, the finance minister said the idea that the Opposition could impose a cut to the budget and then government could ask for a supplementary is “nothing more than a smokescreen.”
He questioned why the Opposition did not approve the entire subsidy in the first place, given that every question in this regard was answered by the Government.
The finance minister also related that the increased rate in electricity tariffs will impose an increased burden on both individual households and commercial entities on GPL’s power grid.
Meanwhile, Minister within the Finance Ministry, Mr Juan Edghill, said reading the Opposition’s leader saying there has been no implication to the budget cuts can only cause one to think that he is “either not well advised, his foot is not on the ground in Guyana, or his head is not thinking the reality of the Guyanese people.
“Is the impact that Mr. Granger is looking for (to be seen in) hundreds of Guyanese people on the streets protesting because they cannot afford to pay the increase in electricity? Is he creating a platform of political instability to further a political agenda?” Minister Edghill questioned.
