The St. Lucia Electricity Services Limited (LUCELEC) announced in a release Friday that despite its fuel-price hedging programme and renewable energy efforts, the sharp hike in oil prices will increase the fuel surcharge for electricity bills.
The release noted that the war in Ukraine is affecting the price and availability of fuel globally, resulting in the price of oil having more than doubled.
It quoted LUCELEC Managing Director Trevor Louisy as saying that LUCELEC can “lock in” the price it pays for some of its fuel through its hedging program.
He explained that this means what the company pays for the percentage hedged remains the same despite the oil price on the world market.
“The balance of the fuel purchased is determined by the current market price. As a result, when there are significant changes in the price of oil as is occurring right now because of continued unrest in Ukraine – it will affect the fuel surcharge and what customers pay for electricity on a month-to-month basis,” Louisy disclosed.
Fuel price hedging is one of the strategies the LUCELEC uses to minimise significant fluctuations in what customers pay for electricity monthly.
“The price LUCELEC pays for fuel is factored into customer bills through the Fuel Surcharge or the fuel cost adjustment that is applied to the units of electricity customers use every month. It is added to the Basic Energy Rates applied to each unit of electricity LUCELEC sells,” the company stated.
LUCELEC publishes the monthly fuel cost adjustment in the Voice newspaper and on its website in keeping with reporting requirements.
Describing the current fuel crisis as a very difficult situation, caused by external factors over which LUCELEC has no control, the utility said there’s something customers can do: use energy wisely.
In this regard, the company announced plans to unveil an Energy Efficient campaign in the coming days using various media platforms.
In addition, LUCELEC said it would continue to monitor the global situation and keep customers up to date on how their electricity bills may be affected.