last year, pushing up the cost of electricity and gas on the Island.

And the cost of gas, with the onset of winter, could go up due to a "significant impact'' of the world oil crisis on the fuel supplies of the Island.

The price of oil, and hence electricity and gas on the Island, is not likely to fall in the near future, according to Belco Holdings Ltd.'s President and Chief Executive Officer, Garry Madeiros.

The hike in the cost of fuel has been attributed to the global fuel crisis, which is affecting the price of oil all over the world.

"The increases in electricity prices that our customers are paying are the direct result of fluctuation in the fuel adjustment rate caused by the world market price of oil,'' said Mr. Madeiros in a quarterly report to the company's shareholders.

According to Mr. Madeiros, the price per barrel of fuel has not been this high since the Gulf War in 1990 and 1991.

He added: "Fuel price increases will most likely have a significant impact on the cost of propane gas for all our customers during the winter.

Unfortunately, the world oil price crisis is an issue over which we have no control.'' In the letter to shareholders Mr. Madeiros spoke of the rising prices of crude oil prices around the world.

"We have heard about demonstrations in Europe, rising fear throughout both Europe and the US, and calls for OPEC to boost oil production.

"Bermuda is not exempt from the situation, which is now nearing a world oil price crisis.

"In August this year, the price that we paid per barrel of fuels was $51.09, including a $15.10 customs duty paid to the Bermuda Government. This represents a 46 percent increase on the $34.99 we paid in August last year.

This increase resulted in higher fuel adjustment rates and hence, higher electricity costs for customers.'' He went on to say that the present situation began in early 1999 when OPEC agreed to restrict oil production following an over supply of oil a year earlier. By the end of 1998 oil prices had reached an average per barrel in Bermuda of $35.86 in December.

Since then oil prices have climbed steadily, with prices in Bermuda rising to an average of $39.14 in October 1999, and in May of $46.50.

Electricity prices He added: "While OPEC agreed earlier this month to increase production by 800,000 barrels a day, oil prices have so far not subsided and most likely will not at that level of production.'' Mr. Madeiros said Belco had not increased electricity rates for the past four years, "contrary to what may be perceived by some of our customers.'' The quarterly report revealed that Belco's total kilowatt hour sales through August 2000 were up 3.41 percent over the same period in 1999.

Sales in the residential sector were up 4.6 percent, while demand sector sales were up 2.7 percent. The company said it expected to see an increase in demand with the completion of the ACE and XL buildings.

Bermuda Gas sales in August were up 7.9 percent on the year before, with appliance sales going up by 3.2 percent. Total volume of gas sales were down 1.7 percent, but as the price of propane gas was up 30 percent, sales in dollar terms were up 12.3 percent.

The continued growth of residential bulk gas deliveries in the first eight months, and the recent increase in small cylinder volume has helped to offset the continued decline in the commercial volume of gas delivered, the report added.