The island’s energy regulator has reversed its position on fuel price hikes after initially overriding efforts by the Government to cap the increases.

Controversy broke out last week when Alexa Lightbourne, the Minister of Home Affairs, announced that she had directed the regulator to impose a six-month limit on the price of fuel — with the Ministry of Finance to compensate importers through a cut on customs duty for any loss of revenues.

Last night, the Regulatory Authority of Bermuda, which is an independent body, confirmed it had initially gone ahead and issued its own set of revised fuel prices, despite Ms Lightbourne’s request.

However, the authority said it had ultimately agreed to the capped price limits set by the Government, in light of the arrangement to offset the limit’s impact on importers.

The US war with Iran, which led to global fuel disruption and pushed up oil prices, was cited by Ms Lightbourne in March. It was raised again last week as justification for ordering a cap on fuel prices similar to steps taken by the Government in February 2022, after Russia invaded Ukraine.

The intervention to shield residents from increasing costs came just ahead of the RA’s mandated increase in prices for gasoline, diesel and kerosene set for last Thursday.

In addition, two versions of the minister’s directive were posted online at the Official Gazette last week — with the earlier version worded more strongly than its replacement.

References to “shall”, “shall not” and “directed” in the first order were toned down in the second instance to say that the RA was “requested” or “invited” to comply.

The second version also included a reference to the autonomy of the RA, stating it was “invited in exercise of its independent functions under section 29” of the Fuels Act 2022.

The RA yesterday acknowledged Ms Lightbourne’s move “regarding the current global fuel crisis and its impact on Bermuda’s retail fuel pricing”.

A statement added: “The RA operates under the Fuels Act 2022, legislation enacted by the Government of Bermuda and applies an established pricing methodology developed prior to the transfer of regulatory responsibility to the RA.

“This methodology has remained unchanged and is applied consistently and transparently in the assessment of monthly fuel price submissions.

“Fuel pricing in Bermuda is determined through a formula-driven process that incorporates global fuel costs, government-set duties and taxes and regulated margins across the supply chain. The only variable element in this framework is the global cost of fuel, which is outside of Bermuda’s control.”

Donn Foggo, the RA’s director of communications and stakeholder engagement, told The Royal Gazette last night: “We fully recognise the impact that fuel prices have on households and businesses across Bermuda.

“Every decision we make considers the consumer — but it must also ensure that the systems people rely on every day continue to function without disruption. That balance is not theoretical, it is essential. Our responsibility is to get that balance right, using a methodology that is consistent and grounded in fact.”

Mr Foggo said the RA had completed its routine monthly assessment in accordance with this established methodology and set an approved retail fuel pricing on April 14.

He said that after an initial ministerial direction on April 15, followed by the revised version the next day, the RA’s Board convened to assess the implications of that direction “within its statutory remit, including concern for the island’s fuel supply and the need to balance fair pricing with the continued reliability and stability of Bermuda’s fuel supply”.

He added: “Decisions taken by the board are guided by law, established methodology and a responsibility to balance consumer interest with the sustainability and security of essential services. As such, the board acted to ensure that any implementation of the Ministerial Direction could be supported by a clear, workable and lawful mechanism, thereby avoiding unnecessary litigation, financial or operational risk.”

Mr Foggo said that after “further clarity” from the minister on Saturday on the proposed funding mechanism to offset sector impacts, the board determined that it was “appropriate to suspend its earlier technical communication and align retail prices with the standstill provisions set out by the Government, while preserving its ability to revisit the matter as necessary”.

Richard Ambrosio, the chief executive of the RA, said the authority was “a technical regulator and our role is to apply established methodologies grounded in law, data and market realities”.

He added: “Our decisions must carefully balance the interests of consumers with the need to ensure a stable, reliable supply of essential services, in this instance fuels.

“This requires a disciplined, evidence-based approach and ongoing engagement with both Government and industry to ensure that policy objectives are implemented in a manner that is operationally sound and sustainable.”

The RA added that its role was “not to set policy but to implement and administer the framework established by government in a manner that is fair, transparent, and consistent with its statutory obligations”.

It said: “The RA will continue to engage with the Ministry of Home Affairs, the Ministry of Finance and industry stakeholders to support the development of a clear and effective mechanism that aligns with government policy while safeguarding the long-term reliability of Bermuda’s fuel supply.”