A second increase for the year in the price of electricity consumption, in Anguilla, from 20 to 31 cents per kilowatt hour has resulted in much concern on the island. But Mr. David Gumbs, CEO of the Anguilla Electricity Company, says nothing can be done about the hike as the price of fuel on the global market is to be blamed.
Speaking in a Radio Anguilla interview with Keithstone Greaves, Mr. Gumbs said: “The background to this is really straightforward actually,” he explained. “For the last couple of years, fuel prices have been increasing. We at ANGLEC were in a favourable position a year ago where we had built up cash reserves – and we were functioning financially in a very strong position.
“What has happened is that fuel prices on the global market have continued to increase over the last two years. Before, we could actually absorb that increase in a much larger fashion. Two things have happened. One is, we had the experience of Hurricane Irma which essentially wiped out our cash reserves so it doesn’t give us the ability to absorb much of this anymore; and two, prices have increased at a much more significant rate where prices have essentially doubled in the last two years.
“From where we were at 12 cents, back in March, we increased it to 20 cents in two phases and that was programmed to ease the burden on our customers. For the last several months, since then, we knew that back in March it [the price] actually should have been 30-odd cents. But we held it back because we were hoping and praying that prices would go done – and we wouldn’t have to do any further increases. We would have preferred to have decreased, but prices continued to increase at a much higher rate and now we are going to the point where we were supposed to be back in March.”
Pressed as to whether it was possible to avoid the increase, Mr. Gumbs replied: “We have done all we could do because, rather than increase [the surcharge] to 44 cents, where it should be today, we are only going up to 31 cents.”
He added: “The real driver of this is outside of our control. That’s global prices for oil. It is refined and distributed throughout the region. Our distributor, which is regionally-based, sells to us and there are costs all along the way. The major part of this cost is really driven by the price of a barrel of oil.”
