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. ”
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.”
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.”
Read More About