VINLEC fuel charged to IADC not part of fuel surcharge – PM

The cost of the fuel supplied by St Vincent Electricity Services Ltd (VINLEC) to the International Airport Development Company (IADC) is not considered in the computation of the fuel surcharge on the electricity bills of consumers. {{more}}

“For that to happen, it would be illegal,” Prime Minister Dr Ralph Gonsalves said, as he responded to a question posed by Leader of the Opposition Arnhim Eustace on Tuesday, during a sitting of the House of Assembly.

Eustace asked whether the diesel procured through or from VINLEC and which is used by the IADC and others to do work at the construction site of the international airport project, was being accounted for by VINLEC separately from that which is being used in the computation of the fuel surcharge.

The Prime Minister explained that the law made it clear that the computation of the fuel surcharge is done using the cost of the diesel used for the generation of electricity.

“I heard this thing on their radio station while travelling,” Gonsalves said.

He added that he had heard senior members of the Opposition New Democratic Party (NDP) saying that the diesel being used at the airport construction site is hurting poor people, because the more diesel used, the greater the fuel surcharge on consumers’ electricity bills.

“It’s just plain wrong,” the Prime Minister said.

Gonsalves said the law states that diesel used for the generation of electricity is the only diesel which can be used in the calculation of the fuel surcharge.

Explaining, he said the methodology used to calculate the fuel surcharge is not an administrative construct, but is found in the laws of the country.

He added that VINLEC charges the IADC the full cost of diesel it supplies to them.

“There is absolutely no subsidy to the IADC,” Gonsalves said.

“Again, that is another falsehood that the surcharge is high because VINLEC subsidizes diesel to the IADC.”

Fuel is provided to VINLEC by PetroCaribe, the Prime Minister said, and PetroCaribe pays for the diesel used by the IADC.

Gonsalves said VINLEC supplies the IADC with between EC$350,000 to $400,000 worth of diesel every month, and at any given time, one would find that the IADC owes VINLEC money for diesel supplied.

However, VINLEC in turn owes more money to PetroCaribe.

“So what happens?”

According to the Prime Minister, at the end of May 2013, the IADC owed VINLEC EC$5.09 million for diesel.

But VINLEC owed PetroCaribe $10.06 million he said.

So, to resolve this situation, Gonsalves explained that both entities exchanged cheques.