Ministry Comment On Fuel Adjustment Rate
The Ministry noted that “only 4 cents of the fuel adjustment rate [FAR] represents government taxes,” the Government “has no direct involvement in setting the rate of the FAR,” with the Minister stating that “notwithstanding the minimal impact government taxes have on the fuel price, I am deeply concerned by the almost 50% increase in the fuel adjustment rate and its impact on families’ electricity bills. ”
BELCO Comment
This follows after BELCO advised that “with the approval of the Bermuda Regulatory Authority, the FAR will increase from the existing rate of 16.513 cents per kilowatt-hour [kWh] to 24.517 cents per kWh.”
“This increase of 48.5% relative to the third quarter of 2023 is primarily the result of the mix of fuel necessary to meet demand in light of current and projected engine availability for the quarter.
“The FAR reflects the total cost to deliver fuel to the BELCO central plant and is comprised of two parts – the fuel adjustment and Bermuda Government taxes. The fuel adjustment is based on the total cost of purchasing fuel and includes shipping costs.
“The second part of the FAR is comprised of two separate Government taxes. Currently the Government charges $31.79 per barrel of fuel in addition to a tax of $0.40 per barrel of fuel which provides funding for the St. George’s UNESCO World Heritage Site.”
Government’s Statement
A Government spokesperson said, “The Ministry of Home Affairs wishes to clarify the government taxes related to the fuel adjustment rate [FAR]. The Ministry can advise that there has been no fuel tax increase by the Government for many years, and at present, only 4 cents of the FAR represents government taxes. Also, under law, the Government has no direct involvement in setting the rate of the FAR.”
Minister of Home Affairs Walter Roban said, “Notwithstanding the minimal impact government taxes have on the fuel price, I am deeply concerned by the almost 50% increase in the fuel adjustment rate and its impact on families’ electricity bills. We live in challenging times, and inflationary pressures and higher living costs only reinforce the consensus that pursuing renewable energy options is vital to Bermuda’s future.”
Who is lying
Can someone please address the inability for Belco to use the alternative fuel i believe it was propane which is cheaper and cleaner
Government do what they do best deflect and kick the can down the road and yes they are responsible they took credit for keeping the prices in check but knew like all of us …fuel prices were rising and sooner or later ( NOW) and the price would have to be increased ….your plp government working for you
enjoy you voted for them
Ro am said “We live in challenging times, and inflationary pressures and higher living costs only reinforce the consensus that pursuing renewable energy options is vital to Bermuda’s future.”
There is a mammoth solar farm on the finger, yet our electricity costs are higher than ever , even before the latest FAR adjustment, so please don’t talk smack about renewable energy options being vital in the context of benefitting tax payers pockets.
$32 per barrel is pretty significant.
“The Ministry noted that only 4 cents of the fuel adjustment rate [FAR] represents government taxes”
So, Belco lied when it said that “the Government charges $31.79 per barrel of fuel” in addition to a tax of $0.40 per barrel of fuel. This issue needs to go back to the Regulatory Authority so that it can be informed that Belco lied!
With the price of oil being around $91 per barrel (the range at the moment is actually $88.16 to 94.99), the lie in relation to “$31.79 per barrel of fuel” represents roughly 1/3 of the price of a barrel of oil.
Or could it be that the Government spokesperson was lying?
Just had a look at my last BELCO bill. Under Fuel Adjustment (0.16513) it clearly states “Fuel adjustment includes Government Taxes on fuel of $94.78.”
A rather big difference to 4 cents of FAR noted by the Ministry.
Clearly the Ministry has lied.
You are comparing BARREL costs with kWh costs.
Government tax per barrel of fuel is $32.19 (i.e. $31.79 plus $0.40).
These equates to 4.427 cents per kWh in Government tax on your BELCO bill.
It would appear that, on average, one BARREL of fuel generates approx 727 kWhs of electricity.
At least Roban didn’t say “cheaper” renewable sources. There is no such thing on a large scale. Solar panels on a house roof is one thing but the cost to build mega wind or solar farms is prohibitive. No wonder so many oil companies trying to go green are scaling back or dropping such schemes.
“the cost to build mega wind or solar farms is prohibitive”
No it is not! Greenrock announced just last week that it was building a wind farm in the ocean around us!
Building any Renewable energy plants will not save us money on our Belco bills. All it is doing (as with the huge solar array by the airport – the finger) is passing profit onto overseas investors. The only thing Bermudians will benefit from is a feelgood factor of the island being that tiny bit greener.
Of course, if you don’t count the carbon footprint of making the windmills and the damage to the reefs from installing and the cabling. No voting Bermudian will be saving money.
Did you read the comment in the RA release saying they have approved BELCO to reduce the amount Belco will pay for excess solar energy fed to the grid.
My tongue was firmly in my cheek. Greenrock is not a business and its members will not invest their own money in a wind farm.
Where does the Honorable Minister of Home Affairs Walter Roban plan on making up for the lost evil fossil fuel taxes from electric cars and wind turbines?
Crickets… Oh, right, and we also need to eat bugs like crickets to save the planet. Is there a plan for Cricket Farming Consultation in the near future?
Contrary to what His Majesty’s loyal opposition would have you believe, there is no need for the PLP Government to balance its budget. We have been told that by successive PLP Governments for the past 2 decades!
Sorry but when he says that your total bill will not go up 48.5 % the difference in the fuel adjustment from $100 to $150 is a considerable amount of money especially for seniors like myself who are on a fixed income. I cannot charge my tenants 48% on their rent can I????? The government should step in right now before there is going to be consequences and it will be too late. Cost of food has gone up in the past year at least 30% and my family can barely afford the cost of food. Healthy choices don’t exist anymore. Government please do something now before it is too late……….
“Cost of food has gone up in the past year at least 30% and my family can barely afford the cost of food.”
Not true! Price inflation in Bermuda is only 3% to 3.5%, far lower than in the U.S., U.K. or Canada. Have you not been listening to what our Government keeps telling us?