Rate hike

Barbadians could soon be paying more for natural gas, as the concessional rates being charged by the National Petroleum Corporation (NPC) are not only preventing the expansion of the natural gas service throughout the island, but could put the State-owned entity in the red within another year.

Prime Minister, the Rt. Hon. Freundel Stuart, leading off debate on the National Petroleum Corporation (Amendment) Bill, told the Lower House that the rates for commercial and industrial customers have not been touched since 1994 and domestic rates have been the same since 2002. Moreover, he stated that the charge to domestic customers is only netting around $450 000 in revenue annually, while the bulk of the revenue, upwards of 80 per cent, which comes from the commercial and industrial customers, is used to subsidise the domestic market.

PM Stuart also noted that only 25 per cent of households in Barbados have access to natural gas and that in fact the service is only available in eight of the 11 parishes. This, he pointed out, has resulted in repeated calls from Barbadians to have the service put in their communities. But, while acknowledging the need to expand the service, he was adamant that it can only be achieved if the Corporation has access to the finances needed to execute it.

“If we are to correct this situation, rates have to be made more realistic, they have to remain concessional, but they have to be made a little more realistic. And I am advised by the NPC officialdom, that at existing rates they’re only able to every year increase the access of domestic customers by 350… But the most marginal of increases would put them in a position where they could add an additional 500 per year, to give a grand total of 850 additional households increase per year if they could get a marginal increase in their rates from what they were at since the year 2002; and this is not an issue that we think is negotiable,” he stated.

He made the point clear as he noted that if the NPC is not granted some level of increase soon, it is projecting a loss for 2018 of approximately $4.7 million. PM Stuart said the NPC cannot be projecting losses of such magnitude in circumstances where it has only reached 25 per cent of the households to date.

“Seventy-five per cent of the households in Barbados are being made to do without access to natural gas, in spite of the fact that upwards of 20 000 households have been benefiting, that too is something in the nature of an injustice that has to be corrected.

And the policy of the Government and the policy of the NPC is to try to reach, as far as possible, that entire domestic market rather than being limited to just 25 per cent of that market. But none of that can be done unless the NPC can pay its way more comfortably than is the case today,” he affirmed.

With that in mind, he said they are expecting that with the changes to the NPC Act, residents of St. Lucy, St. John and St. Joseph, who remain without access to natural gas, “will be justified in having their hopes raised” about getting the service in the near future.

His comments came as he explained that the amendment seeks to not only include natural gas in the definition of petroleum, but will among other things, give the Minister responsible for the NPC the ability to make regulations prescribing the fees to be paid for the installation, connection, examination or inspection of a meter, a natural gas pipeline or natural gas supply line to any premises; or the rates to be paid for the supply of natural gas to residential, commercial, industrial and any other premises. (JRT)