Utilities-Rising fuel oil costs prompt tariff increase |24 April 2012

Rising costs of fuel oil have prompted the Public Utilities Corporation (PUC) to increase its charges of electricity, water and sewerage by 15% for domestic users, with effect from May 15.

Fuel oil, used by the PUC, makes up 76% of its operational costs.
This was announced yesterday by the Minister for Environment and Energy Rolph Payet, in the presence of PUC’s chief executive Philip Morin and the chief executive of the Social Protection Agency (SPA) Jacqueline Pierre.

However, efforts are being made to ensure that the effects of the increase on the more vulnerable groups in society are mitigated.

In the case of electricity, for example, the new tariff has been spread in such a way so that the smaller consumers benefit the most. For instance, a consumer using up to 200 kilowatts per month will pay only R40 more. Dr Payet said that some 40% of PUC clients fall into that category.

He also announced that there will be no hikes in fares by the Seychelles Public Transport Corporation (SPTC) so as not to affect the lower income workers, school children and elderly.

Likewise, there will be no increase in costs of LPG or cooking gas.
The most vulnerable citizens receiving “Adult supplements” from the SPA will have that increased from R1630 to R1903.

Residents of housing units provided by the Housing Finance Corporation (HFC) will have their rents reduced by 25% if they are tenants and if they are on purchase, interest on loans will be brought down from 5% to just 2%. 

This is however optional, as tenants or house purchasers may opt to continue paying under the same terms they have initially agreed so as to pay up over a shorter period. It will also not cover housing loans involving commercial banks.

Announcing the increases, Dr Payet noted the new tariffs are the first since November last year and that since then there have been three significant hikes in fuel prices.

He also said that despite occasional mild fluctuations, oil prices have climbed persistently since seven years.

He said expenditure was no longer sustainable by the corporation and a tariff increase is inevitable if its operations are not to be impacted.

Noting that the situation is being carefully monitored, Dr Payet said government has invested some R200 million in new electricity and water infrastructure, including two new generators.  He noted that fuel oil is also used to power the desalination plants.

He reiterated a pledge made in the National Assembly last week that though the higher fuel costs will total over R5 million for the ministries and parastatals, no supplementary allocations will be made. They will instead be encouraged to take all possible measures to save energy and water.

Dr Payet said his ministry will soon be embarking on a national sensitisation campaign to encourage all residents to avoid wastage of electricity and water and teach them the best ways to do so.

He noted that positive results have already been registered with the photovoltaic solar panels installed at Ile Perseverance and toward the end of this year, the wind farms in Romainville and Ile du Port should provide the country with 11% of its national energy needs, hence cutting back on expensive fuel.