Fuel prices affect BVI Economy

Two Saturdays ago this newspaper carried a full page advertisement of the British Virgin Islands Electricity Corporation informing the general public that due to the increase in world fuel prices there has been an increase in the Fuel Variation Charge of electricity bills. Five days later the Chief Minister, Dr. Orlando Smith issued a statement in the Legislative Council that his government has been "anxiously evaluating the situation and like many nations continuously assessing the trend and projecting the possible outcomes".

The escalation of the price of fuel is having a serious effect in nearly all the countries in the world. The prices of airfares have gone up, employees in most states in the USA have introduced a pool system whereby they share their vehicles with neighbours, friends and relatives, and persons disposing of their big vehicles and replacing them with smaller ones.

Car sales managers said that there is a high increase in the sale of smaller vehicles with better gas mileage. Some gas stations have gone so far as to put a hold on their customers checking account for as much as $100 if they used a debit card to make their purchase. This of course has angered consumers and the matter is now being investigated by U.,S. Public Interest Research Group in Washington.

Caribbean governments are trying to see what assistance can be given to their citizens who are going deeper and deeper in their pockets to face the rising cost of living. Guyana, which is one of the poorest countries, is trying to cushion the high energy price to make it a bit easier for its consumers.

Here in Tortola, a Committee headed by two lawmakers, Dr. Kedrick Pickering and Elmore Stoutt has been appointed to look into the matter and advise the government on ways it can assist with the problem in an effort to ease the burden on the consumers, to plan for the future and possibly reduce the territory's dependence on fossil fuels through utilization of alternative energy source.

The Electricity Corporation is the main consumer of energy in the territory, and it costs the government a tidy sum annually to pay for its fuel to operate the generators.

The cost of fuel has risen steadily in recent years and even more so in recent months with the price of crude oil reaching a record high of $65.00 a barrel, and according to the BVI Electricity Corporation's advertisement this increase has resulted in BVIEC's Fuel Variation Factor rising from 3.64 cents in March 2005 to 6.3 cents in August 2005.

The BVIEC is encouraging its customers to conserve energy.

One of the terms of reference of the Pickering/Stoutt Committee is to look at the utilization of alternative energy resources. Perhaps it might be a good idea if the Committee sees the wisdom to go back to the olden days and use coal to energize some of the machinery for a period of time until there is a significant change in the prices of fuel. Some citizens will not agree with this move which might be considered antiquated, but the authorities should look at all ways and means in order to assist the consumer. In this respect we sincerely hope that the Committee will come up with innovative and valid ideas, but we all know that  it’s not going to be easy.

Guest editorial by Oscar Ramjeet