Commercial rates for natural gas will increase from next month, as government moves to stem the millions of dollars in ongoing losses at the National Petroleum Corporation (NPC), Prime Minister Mia Mottley has announced.
She disclosed to Parliament on Monday during her Budget speech that the NPC, which has incurred accumulated losses of $34 million over the period of 2016-2017 to 2021-2022, makes an operating loss of almost $700,000 monthly on the sale of natural gas alone and its operating expenses are an additional almost $1.1 million.
“This is a substantial ongoing loss that requires a permanent fix,” Mottley said before outlining measures to be taken to eliminate that deficit.
She said Government has reviewed the costs in contracts and will be reducing monthly operational expenses by about $200,000 per month; working with business to boost local production and where it cannot do so to source cheaper natural gas imports; and reduce the 15 per cent natural gas leakage in the mains.
“These efforts will reduce the burden on consumers of fixing the deficit and will allow us, therefore, to keep domestic and residential rates constant at $1.70 per cubic metre of natural gas. There will be no increase of residential and domestic rates for natural gas. However, the hole is too large and too driven by an uncommercial price, and so we will need to raise the commercial rates modestly to eliminate at least a third of the deficit,” Mottley announced.
As a result, commercial rates for natural gas will move to $2.28 for consumption up to 500 cubic metres; $2.24 for consumption from 501 to 2500 cubic metres; $2.22 for 2,501 to 10,000 cubic metres and $2.20 for consumption over 10,000 cubic metres.
While domestic rates will remain unchanged, the fee for the rental of meters for domestic customers will double, from $5 to $10 per month and the fee for commercial customers will increase from $15 to $25 per month.
“These measures will ensure that the National Petroleum Corporation is put on a sustainable path and that there is continued investment and production in cheap local natural gas,” the Prime Minister said.
(DP)
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