Over $33.3 Billion in subsidies have been approved for power companies in the country, with the Guyana Power and Light (GPL) in line to receive the lion’s share which totals $25.8 Billion.

In defence of the Budgetary allocations, Minister of Public Utilities and Aviation, Deodat Indar, told the Parliamentary Committee of Supply that the subventions will mostly be used to assist with the purchase of fuel for power generation.

In response to a series of questions posed by Forward Guyana Movement (FGM) Member of Parliament, Amanza Walton-Desir, Minister Indar clarified that the $25.8 Billion budgeted for GPL will be used to subsidize the cost of fuel. 

“So, $25.8 Billion is for GPL, and it directly relates to the fuel subsidies that we give to GPL, mind you, you have known that fuel price fluctuate and has been on the rise year on year on counting. So, GPL budgets at a breakeven point around US$70 per barrel, and anything above that puts GPL at a loss position. So, fuel is traded all the time at a high. Right now, the average for last year is about $83. Now for every dollar increased in fuel it costs GPL $543 million, every dollar. Fuel goes up back, costs GPL $543 million, simply because of the amount that is used,” Minister Indar explained.

It was further explained that 93 percent of the fuel utilized by GPL is Heavy Fuel Oil (HFO) while Light Fuel Oil (LFO) accounts for the remaining 7%. The Utilities Minister said GPL’s fuel bill amounts to approximately $40 Billion per annum, and represents a big share of the generation costs.

He said although the price of fuel continues to fluctuate, the Government has not increased the cost of electricity for local consumers.

Aside from GPL, the Hinterland Electrification Company Inc. is budgeted to receive $95 million; the Kwakwani Utilities Inc, $998.937 million; Lethem Power Company, $662.5 million; LINMINE, $4.812 Billion; Mahdia Power and Light Company Inc., 158.6 Million; Matthew’s Ridge Power and Light Company, $75 Million; Port Kaituma Power and Light Company, $105.3 Million; Moruca Power and Light Company, $60 Million and the Mabaruma Power Company, $545 Million.

Minister Indar explained that besides the Kwakwani Utilities Inc, which provides other utility services such as water, all the other companies will be using their subventions to purchase fuel.

Turning the Committee’s attention to Linden, Region 10, MP Walton-Desir inquired whether LECI will remain the primary electricity service provider to the people of Linden. Minister Indar said while the town’s electricity continues to be subsidized, in the future Government intends to incorporate the town into the national grid.

“We have in this budget about $4.768 Billion to subsidize the fuel – it has always been that way… First of all the cost that we pay to Bosai is very high, and we sell it back very low to the consumers. With the expansion of GPL’s grid and using gas as a feed stock we intend to move the grid towards Linden, towards Wismar,” he said.

He assured that the future plan will not see Lindeners paying more, explaining that the Gas-to-Energy Project, when operationalized, is intended to reduce the cost of electricity by 50 percent.

He disclosed also that the bauxite company, Bosai Minerals Group, is also installing solar energy to meet the growing demand for electricity, while Government is building 15 megawatts of solar power in the town.

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