Prime Minister Godwin Friday stated that the country is experiencing extreme pressure due to rising costs associated with generating electricity, and he warned that if some type of intervention does not occur the current fuel surcharge will continue to rise significantly higher than the present 29 percent increase in the first quarter of this year.
In order to limit the impact of increasing electricity rates on residential customers, schools and small business operations, the government will eliminate customs service charges as well as excise taxes on all diesel used for electric power generation.
The total amount of tax elimination will be approximately $1.65 million dollars during the next three-month period, and all monies saved by eliminating these taxes will be immediately transferred to consumers.
Stating that addressing the crisis will require “participation and mutual obligation”, Friday announced that the national electricity company (Vinlec) will be compelled to assist in providing a financial cushion for consumers.
Under this dual-approach, if the fuel surcharge rises above 71 cents/kwh, Vinlec must provide an equal 50 percent match of the fuel cost formula. In addition, if the fuel surcharge increases above 77 cents/kwh, Vinlec must provide a complete 100 percent match of the fuel cost formula for all household accounts.
Friday emphasized that his administration’s purposeful action was to ensure that electricity bills do not become unmanageable and that families are not forced to make difficult decisions such as whether or not to pay their electricity bill versus purchasing food.
As part of a larger plan of action, the Government plans to utilize this global oil crisis as a mechanism to create greater long-term stability and lower electricity prices.
In support of this goal, the Administration will continue its policy of waiving 100 percent of all applicable taxes on solar photovoltaic systems. This is intended to expedite the Nation’s move towards renewable energy.