Flawed Fuel Policy

Barbados governments of recent have implemented a policy to pass on fluctuations (calculation unknown to the public) in the price fuel to the consumer. Barbados is a net importer of goods and as a consequence when world market price of oil increases, it has an inevitable result on the cost of living. It is a stretch to expect government during the prevailing harsh economic times will surrender revenue at a time it is in decline. Some opine the policy should be amended to give the commercial sector preferential pricing – how could this work? A subsidy, what about unregistered SMEs? The wholesale approach to fixing the price of fuel at the pump in the prevailing climate is unimaginative and requires urgent intervention. – David, Blogmaster


From mid-night December 5, consumers in Barbados paid more for gasoline and diesel. The retail price of gasoline rose from $3.95 BDS to $3.99 BDS per litre, an increase of four (4) cents or 1% from November. Diesel also followed suit rising from $3.28 BDS to $3.40 BDS, an increase of twelve (12) cents or 3.7% from November (Source: Barbados Government Information Service).

The rest of this post explores this month’s price change in five charts below, and also looks at some highlights and insights from 2021.

Chart 1 Below: Month over Month % Price Variance for Gasoline (2021 Retail Prices).
Chart 1: Month over Month % Price Variance for Gasoline (2021 Retail Prices).

Read Full report@caribbeansignal.comWebmaster Amit

11 comments

  • The Williams brothers, or the rest of them still around, have been driving with solar power for a long time. Those who still rely on fossil fuels have only themselves to blame.

    Why don’t we have a Tesla store on our island?

    Like

  • There is the role of government to easily facilitate Tron. We are not there yet.

    Like

  • Flawed Fuel Policy

     

    From time in memorial they used to say

    Let sleeping dogs lie and don’t cause the donkey to bray

    And we didn’t the dog’s we would see

    When faced with the problems in Society

    Epidemics are dogs if let to lie

    Develop into pandemics that can cause millions to die

     

    Foolishly saying nothing to donkeys of today

    Unveils presidents like in the great U.S.A

    Every chance you get to stand up for a Right

    Let the donkeys bray, battle your plight

     

    Perhaps if we had better relations with our neighbors gas prices wouldn’t be

    Out of the range of our struggling economy

    Latinos are neighbors but where is the bidirectional trade

    I’ve seen the extremely low prices from Venezuela yet profits were made

    Can we not forge good ties with these neighbors and boost our economy?

    Years now we have been struggling with this Flawed Fuel Policy

     

    By Khaidji

    http://www.BajanBooks.com 

    Like

  • Why don’t we have a Tesla store on our island?
    Because their product offering doesn’t match Barbadian roads. The more compact EV’s are better suited. Everybody makes EV’s today. To besides you don’t see Musk selling out rapidly.

    But tell me @Tron, a significant portion of gas prices are taxes, some of which go to build/maintain roads. Where does that money come from when the gas tax disappears. Does the tax switch to tires, as that is the one common feature? Or to the vehicle license? Or to ————?

    Liked by 1 person

  • @ NorthernObserver December 15, 2021 11:27 AM

    If we all drive with electricity from the solar roofs of our villas, the government should simply raise the prices of basic foodstuff. People always have to eat, and besides, most of them are far too fat anyway.

    Liked by 1 person

  • NO

    They put the gas tax because they weren’t paying the road tax

    When the gas tax gone they will go back to road tax.

    Note they putting in infrastructure to catch infringing vehicles. The whole process should be up and running by the time the switch over is completed

    Liked by 1 person

  • Catch vehicles not insured and stolen. There is a big stolen car racket in Barbados going on.

    Liked by 1 person

  • my condolences …….. it seems one of the donkeys in the squirrel cage producing your electricity has passed away.

    Like

  • David.

    That may what it will start out doing now at the start up . Wait for the upgrades the will come between now and proposed 2030

    Like

  • BL&P against sharing
    by SHAWN CUMBERBATCH
    shawncumberbatch@nationnews.com
    BARBADOS’ LONE ELECTRIC utility is not in favour of sharing with its customers the cost of any fuel hedging programme it enters under the Fair Trading Commission’s (FTC) oversight.
    In a recent decision, the regulator ruled that such expenditure would be shared equally between Barbados Light & Power Company Limited (BL& P) and its customers via the Fuel Clause Adjustment (FCA).
    However, BL& P has notified the FTC that it wants this decision reviewed and varied because it would otherwise be “introducing a speculative, profit-making element to the fuel charge, which distorts the nature and function of the FCA”.
    The company confirmed this in a statement to the DAILY NATION.
    “The Barbados Light & Power Company requested that the FTC review one specific element of the fuel hedging decision regarding a 50/50 cost-sharing arrangement between Light & Power and customers in relation to the hedging administrative costs and any gains and losses associated with the hedging programme,” it said.
    “Light & Power believes that this particular determination runs contrary to the existing principles on which the Fuel Clause Adjustment is based.
    “If this approach is pursued it would effectively result in speculation on the company’s part rather than hedging where the customers receive the full benefit and cost of a hedging programme via the FCA. This is the primary basis for our motion for review,” it added.
    BL& P, which has more than 130 000 customers, purchases fuel under contracts with the Barbados National Oil Company Limited (BNOCL), Sol (Barbados) Limited and Rubis West Indies Limited. The BNOCL is contracted to supply heavy fuel oil, Sol supplies aviation jet fuel, and Rubis provides fuel. The cost of fuel is recovered monthly from customers through the FCA.
    Specific concerns
    In its most recent application for the FTC to approve a fuel hedging programme, the company said that each year it used about 250 000 tonnes of fuel, which cost $266 million in 2019. Most of this was for heavy fuel oil (57 per cent), followed by aviation jet fuel (39 per cent) and diesel (four per cent).
    In its decision delivered in October, the FTC said while it supported BL& P’s use of fuel hedging it did not think the company “provides sufficient protection
    for a potential negative impact to the consumers”.
    The regulator’s specific concerns included “a lack of sufficient evidence from the BL& P showing that customers are willing to pay for the reduction in volatility; limitations around the consumer being able to benefit when the price of fuel falls; [and] and insufficient justification for the consumer to bear the full risk of a hedge programme in an environment where the BL& P has no control over the decisions made in the international arena”.
    “The Commission notes that according to the BL& P’s proposal, it incurs no risk in this strategy, as all of the risk of hedging is passed on to the customer,” the FTC stated.
    “This is especially important given that the BL& P has presented no evidence to support its assertion that the Barbadian customer is so risk-averse as to pay for the costs associated with a reduction in fuel price volatility.”
    However, in its motion for review of the decision, BL& P stressed that the FCA was intended for its full recovery of fuel and associated costs.
    “[BL& P] makes no profit or loss on the acquisition of fuel at present and this cost is passed on wholesale to customers via the FCA. Associated costs related to the acquisition of fuel, such as storage costs, are also passed on,” it stated.
    “The decision now appears to seek to change this basic principle by introducing a speculative, profit-making element to the fuel charge, which distorts the nature and function of the FCA. Fuel costs are currently a direct pass-through to customers with no opportunity for [BL& P] to profit from the purchase transactions.
    “By allowing the [BL& P] to share in the gains and losses of the programme, the decision incentivises the [BL& P] to enter into hedges with the objective of securing a profit from the fluctuation of fuel prices,” it added.

    Source: Nation

    Liked by 1 person

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