Bahamas Electrical Workers Union (BEWU) President Paul Maynard said yesterday the government’s decision to temporarily increase the value-added tax (VAT) exemption ceiling on electricity bills from $200 to $300 will not be beneficial for most Bahamians.
“That [isn’t] going to make a difference for the average person,” Maynard said.
“The average person’s bill is over $300. The average bill got to be about $400. For the poor people, that’s fine for them, but for the average middle-class bill it’s over $400 or $500.”
Prime Minister Dr. Hubert Minnis announced the increased exemption in Parliament on Wednesday.
“This recent temporary spike in fuel surcharge has unfortunately put a number of qualifying customers over the $200 threshold,” Minnis said.
“I today advise the honorable House that the government will be moving an amendment to the law to allow for a temporary increase in the VAT-exempt ceiling from $200 a month to $300 per month to the end of the fiscal year, that being June 2019.
“This will be made effective for December 2018 and will show up in the January billing cycles.”
But Maynard said a struggling single mother will not benefit from the exemption if prices continue to increase.
“When you [are] scrapping money, that’s a lot of money,” he said.
“You [have] to understand that when you’re scrapping, every dollar is a lot.”
He said, “People are suffering and you should help them out. You asked to be elected, you’re elected so get with it.”
Bahamas Power and Light (BPL) signed a memorandum of understanding (MOU) with Shell last week for a gas-to-power project, a move that BPL Chairman Dr. Donovan Moxey said begins the process of delivering cheaper energy and significantly reducing the number of blackouts.
Maynard said the government needs to call on Shell to assist with the crisis Bahamians are facing.
“If I were prime minister, I would go to Shell and I would say, ‘Look here, you’re now our partner; we need to do something about this because we are now in crisis mode’,” he said.
“But you [have] to understand that we are now in crisis mode. My belief is, everywhere I go people are complaining. The small businesses especially, and I tell you if we can get this bill cut in half, it would be a new economy.”
He added: “[Shell] can move whatever they need to move if they want to help, and you need to say to Shell ‘You’ve got us for the next 30 years; here’s what we need, we need you to rescue us until 2020’.”
BPL bills have spiked in recent months. BPL officials say this is due to higher oil prices leading to an increase in the fuel surcharge.
The fuel surcharge typically makes up the majority of electricity costs for the consumer. BPL passes on the charge directly to the consumer.
The fuel surcharge has steadily increased this year. In the February billing period it was 14.75 cents per kilowatt hour (kWh); in the March cycle it was 14.9 cents per kWh; in April, the surcharge rose to 15.68 cents per kWh; in May, it jumped to 17.46 cents per kWh; in June, it was 17.38 cents per kWh; in July, the surcharge per kWh was 19.46 cents; and in the August and September billing periods it was 19.15 cents per kWh.
Moxey said consumers might not get any relief for months as the electricity company continues to grapple with generation issues stemming from a fire that impacted two of the Clifton Pier power station’s largest engines in September.