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OBA demands answers on Fuel Adjustment Rate

Suddenly silent: Walter Roban, the Minister of Home Affairs, has yet to explain how the cost of electricity will be reduced (File photograph)

The One Bermuda Alliance is calling on the Government to explain exactly how it will bring about a reduction in the price of fuel.

Jarion Richardson, the party leader, spoke out one week after Walter Roban, the Minister of Home Affairs, said that a recent price hike will be scaled back “in the immediate future”.

At the beginning of October, Belco announced a Fuel Adjustment Rate increase to record levels despite the price of fuel oil being relatively stable and far below recent peaks.

The move took the overall rate up by about 20 per cent.

A week later, Mr Roban ordered the Bermuda Regulatory Authority to explain why it had approved the increase, adding that legal action could be taken if the RA had used incorrect methodology in calculating the FAR

The RA replied to Mr Roban’s demand on October 13 in a detailed explanation said to have run to 400 pages.

A statement issued by Mr Roban’s ministry last Tuesday said categorically that the FAR will be reduced, and that the RA had agreed to change the way it calculated it in the future.

However, both the Government and the RA have remained silent on how and when these goals will be achieved, despite repeated requests by The Royal Gazette for answers.

Mr Roban also refused to answer questions posed by this newspaper at a public meeting last Thursday.

In response to a question from a member of the audience, he did say that stakeholders were working independently to examine “potential” ways to reduce costs.

Mr Richardson said yesterday: “Bermuda has been left with questions, not answers, over the Government’s announcement that increases to energy prices will be scaled back.

“The FAR increase was announced over a weekend, and then only with some prompting were the RA and Government compelled to act.

“From our understanding, Belco was trying communicate with the RA for sometime before the FAR announcement without luck. Further, we understand that it was Belco who initiated the resolution to the energy price increase where that is clearly a matter of public policy — it is not for the energy company to resolve the Government’s problems.

“If the Government insists on taking a victory lap, then the Government must answer basic questions.

“They said they have spoken with a group of stakeholders and all agreed to do something. What exactly is going to change? The FAR methodology? The tax per barrel?

“The point has been made that the FAR is reflective of the price per barrel. Given that we can’t change that — or can we? — how are the stakeholders going to reduce what appears to be a fixed cost?

“And what has the Government learnt to avoid this disastrous economic policy going forward?”

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Published November 01, 2023 at 7:56 am (Updated November 01, 2023 at 7:56 am)

OBA demands answers on Fuel Adjustment Rate

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