In a wide ranging interview with the St Vincent Times, Vaughn Lewis, the Chief Executive Officer of St. Vincent Electricity Services Limited (Vinlec), has expressed cautious optimism that electricity consumers may soon see a reprieve as fuel surcharges are expected to trend downward in the coming months.
Speaking on the company’s financial outlook, Lewis revealed that Vinlec has faced unprecedented costs this year, with a fuel bill reaching approximately $58 or $59 million by the end of June. He noted that the company has never paid $100 million for fuel in a single year, but current trajectories suggest they could reach that mark for the first time.
Despite the record spending, Lewis stated he expects the fuel surcharge for the upcoming month of August to be lower than the current rate. This projection is based specifically on the cost of fuel currently in the company’s stock.
“I expect the fuel surcharge next month to be less than it was this month,” Lewis said, noting that while he previously warned the public about a “bump” in rates when they hit 70 cents, the data now points toward a decrease. He shared that he is “very hopeful” that the surcharge seen this month will be the highest for the remainder of the year.
Lewis explained that Vinlec tracks diesel prices on a weekly basis using the US Gulf Coast benchmark. According to his tracking:
- April: Diesel prices peaked.
- May: Prices began to trend downward.
- June: Prices reached a “good level”.
- Recent Weeks: Prices have fluctuated back up to May levels due to increased geopolitical activities in the Middle East.
While Lewis cannot offer a guarantee due to the volatility of global markets, he remains optimistic that a downward trend will prevail. “I could only be hopeful because you have to be optimistic,” he remarked.
Addressing public concern over how these costs are passed to consumers, Lewis emphasized that the fuel surcharge is not arbitrary. The calculation is strictly governed by the Electricity Supply Act, which outlines the legal rate structure.
To ensure accuracy and transparency, the calculation undergoes:
- Internal Vetting: Two different sections of Vinlec review the numbers.
- Internal Audits: The internal audit department periodically verifies compliance with the law.
- External Audits: A reputable auditing firm reviews all financials annually.
Lewis acknowledged the “cry everywhere” regarding high bills and stressed that Vinlec is also feeling the pinch. He explained that while the fuel surcharge covers the cost of diesel, Vinlec’s base rate is under stress from rising shipping, material, and equipment costs.
He further noted that the company’s staff members are not insulated from these costs. “There are no discounts to staff for electricity in Vinlec,” Lewis stated, confirming that every employee faces the full electricity bill just like any other citizen.
While other islands in the region are struggling similarly, Lewis pointed to Dominica as an outlier because their geothermal and hydro projects now account for nearly 40% of their generation, shielding them from the full impact of global fuel spikes.
