Howard Walker, Staff Reporter
THE UTILITIES companies and persons in the gasolene and transport sectors seem to be sending a signal out to their customers brace for price increases if the devaluation of the Jamaican dollar continues.
"No doubt that, in the long run, as a result of these measures, the prices will eventually go up," said Lloyd Brown, president of the Jamaica Gasolene Retailers Association (JGRA). "Our price is indexed to the US dollar so if the Jamaican dollar depreciates it can, in effect, lead to an increase in price. Now we also have a situation where the price is influenced by the US Gulf situation (the war in Iraq), so whatever is happening there will impact on prices here."
However, he stated that one of his major problems is that the association can't unilaterally change the prices whenever it feels, because of the pricing arrangements it has with the respective marketing companies.
"They more or less tell you what price to sell at. Our costs are going up yet our margin is essentially fixed. We want to get out from under that regime."
In an earlier report, a leading local money market trader said consumers are likely to see price hikes in three crucial areas, gasolene, electricity and transportation.
"It's very frightening," said Courtney Wright, one consumer, when quizzed about the possible increase in gas prices. "If the gas price is increased then the transportation prices might."
A matter which the Minister of Transport and Works, Robert "Bobby" Pickersgill, did not want to speak about. "I will not be speculating on the matter," was the terse response from the Minister.
However, Winsome Callum, manager, corporate communication at the Jamaica Public Service Company (JPSCo), says "This week's devaluation of the Jamaican dollar will not immediately affect customers' electricity bills." She emphasised that the billing exchange rates used each month is based on the daily average official rates for the previous month. May's bills will therefore reflect an average of the exchange rates for April. In fact, there will be an overall decrease in bills customers receive this month, primarily as a result of a 10.4 per cent reduction in the fuel rate. Adjustments are made to the fuel and foreign exchange charges applied to bills each month. Among the factors that determine the final amount on customers' bills are: usage (measured in kwh), number of days in the billing period, and fuel charges, all of which are reflected on the bill.
However, a source at the JPSCo told The Sunday Gleaner that based on the devaluation of the Jamaican dollar and the company's foreign exchange adjustments "You are bound to see an increase if the usage is the same, it might not be a large amount, but it will (increase). It is really a combination of two factors, the usage and the exchange rate that determines the bill. If you use less fuel and the dollar devalues, then your bill might be the same as the month before. If you use the same amount of fuel and the dollar devalues, then you are bound to see an increase."
Similar comments are coming from the National Water Commission (NWC.
According to Elaine Lawrence, business operations manager, "The only impact it has, is the increasing of the Price Adjustment Mechanism (PAM) rate. It's the indexation on the bill, it moves every month with the foreign exchange, the Consumer Price Index (CPI) and electricity charge. Each time there are movements in any of these factors the PAM rate moves". The PAM percentage for March was 38.81 per cent, April 41.06 per cent and May is 44.61 per cent.
