VICE-PRESIDENT Dr Bharrat Jagdeo has promised that the government will not increase electricity or water rates for consumers, even as the country grapples with global economic challenges that has caused widespread price increases.

Shipping challenges resulting from the COVID-19 pandemic, now exacerbated by the Ukraine-Russia crisis, have resulted in a significant increase in prices for food, fuel and other commodities.

“With all the escalating prices now, we’ve been hit hard by the cost of living and the world has been hit by this because of COVID. Prices have gone up and now with the Russia-Ukraine crisis, it would probably go up even more,” the Vice-President said at a recent event commemorating the life of Guyanese founding father Dr Cheddi Jagan.

He, however, emphasised that the government was pursuing action to guarantee that this price surge does not adversely impact people.

“We will keep the electricity prices the same way, and water prices, because we have to subsidise it[sic] to make sure that the impact is not felt by ordinary people,” the Vice-President emphasised.

Subsidisation refers to payments made by a body (in this case, the government) to pay a portion of expenses to keep a selling price low. With expected increases in the cost of fuel, for example, this means that the government will spend money to offset the increases so that consumers’ rates are not raised.

And already, price increases in electricity are expected. Last week, the Guyana Power and Light (GPL), via a press release, said that the Russian invasion of Ukraine and other events taking place in Europe are severely impacting its operations.

Consequently, GPL has been forced to pay more money to import fuel to run the power plants that generate electricity. According to the release, this has increased GPL’s total monthly operating expenses to approximately $4.5 billion against monthly electricity sales of approximately $3 billion.

“This means that GPL has to utilise every dollar it collects to meet its operating expenditure. This financially challenging position cannot be sustained at current fuel prices,” the utility company said.

Across the country, fuel increases are also evident at gas stations. But Dr Jagdeo said that the People’s Progressive Party/Civic (PPP/C) government’s economic philosophy of social spending to ensure that people did not face hardships will be maintained.

During his remarks, Jagdeo reminded the gathering that Dr Jagan was all about fiscal discipline and not consumption-based spending. As such, he contended that the PPP/C government has always had the impetus to manage the national purse prudently.

“… we are guided by some principles. It is the principles that often matter. It’s the underlying principles that were embedded in the party that would allow us to be successful,” he said.