Tue | Oct 3, 2023

Higher fuel prices will affect cost of electricity – JPS

Published:Wednesday | March 9, 2022 | 1:09 PM
The JPS notes that fuel makes up about half of customers’ electricity bills, so the changes from one month to the next can be quite significant. -File photo.

The Jamaica Public Service (JPS) is raising an alarm that rising fuel prices in the wake of Russia's invasion of Ukraine will affect the cost of electricity in Jamaica.

The light and power company notes that Jamaica is heavily dependent on imported oil and natural gas for the production of electricity as well as for transportation and manufacturing.

JPS chief financial officer, Vernon Douglas, points out that the war in Ukraine means fuel is much more expensive and there is less of it, underscoring that the prices of both oil and natural gas have increased since last year.

Douglas believes that they will increase much more now.

“A higher fuel cost means higher electricity costs. We have to pay more to the fuel suppliers. We have no choice.  Fuel makes up about half of customers' electricity bills, so the changes from one month to the next can be quite significant,” he said.

JPS says it is also concerned about the possible shortage of fuel for Jamaica. 

The company says it has started discussions with its fuel suppliers, Petrojam and New Fortress Energy, to assess their ability to meet the country's fuel needs.

“Our suppliers are exploring all options to secure fuel to keep the lights on. There could be a global fuel shortage as sanctions tighten on Russia. As a small country, Jamaica could be badly affected. We all have to work together to get through this global crisis,” said Douglas.

Meanwhile, the JPS CFO says he is relieved that the Government plans to cushion the impact of increasing energy costs on the most vulnerable.

He is hoping that the Government will also suspend the fuel and electricity sales tax (GCT) to further ease the burden on consumers during this difficult time. 

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