Is the Fuel Surcharge a Fair Reflection of Fuel Prices?
Once again the price of oil has started to rise on the world market with reports of economic recovery and the decline of the US dollar. As a result, NEVLEC is paying more for oil since the price of oil to NEVLEC follows the same market trend. Keep in mind that the company buys oil at the market price via the Mean Caribbean Postings and also pays whatever mark-up that is allowed in the fuel contract.
To be clear, therefore, NEVLEC wishes to state that the rise in the fuel surcharge is due to world oil price increases. Our calculations are published in the newspapers so that you can analyse and cross-reference for yourself by following oil prices on Channel 42 and on the internet. Our generation statistics remain within the same general range of 4,000, 000 to 5,000,000 kWh per month depending on the activities during the month.
Below is a graphical comparison of the trend taken in oil prices from December 2005 to October 2009 and the fuel surcharge on your bills during that same period. The graphs are almost identical in shape showing that the fuel surcharge trend is a reflection of the world market oil price trend.
|
Fig. 1: Crude Oil Prices between December 2005 and October 2009
|
|
Source: NEVLEC data
Figure 2: Fuel surcharge levels between December 2005 and October 2009.
We apply the fuel surcharge at the rate that we pay for the diesel fuel based on the world market prices. The fuel surcharge is a strict pass-through charge and under the regulatory framework, NEVLEC is not allowed to profit from this charge.
We continue to work with our partners to reduce the effect of the world oil prices on your electricity bills by holding down the cost to you to the extent possible, and by investing in renewable energy.
