Despite a new fuel charge introduced in the latest Budget, electricity rates will not rise, according to Economic Development Minister Grant Gibbons.

Dr Gibbons cited the recent drop in oil price, which reduced the electricity cost to Belco customers from a high of 44.9 cents per kilowatt hour to 37.9 cents per kWh — a decrease of 7 cents per kWh.

He said that the impact of the fuel duty going into effect on April 1 would be offset by lower oil prices.

The electricity utility has informed Government that if oil prices remain low, residents can expect further decreases, as older, more expensive oil is used up.

Dr Gibbons said: “In response to concerns in the media about duty increases on fuel and higher electricity costs, I approached Belco’s parent company CEO, Walt Higgins, to better understand the real impact on customers.

“There is no doubt that the Budget’s proposed five cents per litre increase in the fuel import duty will have the effect of increasing the fuel adjustment component of the electric bill.

“But in actual cost terms, this amounts to an increase of about 1.1 cents per kWh, which is more than offset by the 7 cents per kWh reduction that Belco customers are experiencing due to the drop in oil prices.”