CASTRIES, St Lucia, CMC:
THE ST LUCIA Electricity Services Limited (LUCELEC) says a decision by Hess Oil St Lucia Limited (HOSLL) to freeze fuel prices has resulted in lower fuel surcharge rates to consumers in the country.
Hess, which owns a storage farm on the island, has decided to freeze its fuel prices at pre-Hurricane Katrina rates, resulting in a saving of EC$1.2 million (US$440,000) on fuel charges for LUCELEC.
LUCELEC said the decision by Hess to voluntarily freeze its fuel prices resulted in a Fuel Surcharge Cost Adjustment Factor (FSCAF) of 36.5 cents (US$0.13 cents) instead of the 41.3 cents (US$0.15 cents) per kilowatt that would have applied without the price freeze.
"The FSCAF mechanism used in a fair and equitable way of determining electricity prices and this system is used extensively throughout the industry," LUCELEC stated.
"The FSCAF mechanism allows the company to reflect the current price of fuel in its electricity tariffs, so as the price of crude on the world market goes up and the cost from Hess reflects that increase, the rate goes up accordingly," says LUCELEC's managing director Trevor Louisy.
"Conversely, as the price on the world market drops or decreases, the rate is reduced as well. What you will find is that in the offer Hess has given us, the price that existed on August 26 will prevail as long as it is lower than the current price and the present agreement remains in effect," Louisy added.
Hess said that it would absorb the price increase "as long as it remains financially feasible to do so".
