GOVERNMENT MOVED yesterday to cushion Barbadian households and businesses from looming increases in global oil prices, unveiling a suite of financial and policy measures designed to stabilise electricity and fuel costs while the international energy market remains unpredictable.
Delivering the 2026 Budgetary Proposals And Financial Statement in the House of Assembly, Minister of Finance Ryan Straughn outlined a multipronged response that included the hedging of fuel purchases, subsidising of electricity costs, capping taxes on gasoline and diesel, and encouraging national energy conservation.
Central to the Government’s strategy is the fuel price hedge arranged through the Barbados National Energy Company Limited, the national fuel importer. Acting on Government’s instructions, the company has locked in the price of heavy fuel oil at US$92 per barrel for the next three months.
Heavy fuel oil is the primary fuel used for electricity generation by the Barbados Light & Power Co. Ltd.
Straughn said that with Brent crude trading close to US$106 per barrel, the hedge effectively shielded Barbados from further spikes in the short-term.
“This hedge was not done as a gamble but as insurance,” he said. “It protects Barbadians against future price spikes while the conflict continues.”
Over the 240 000 barrels covered by the hedge (about 80 000 barrels per month), Government estimates saving between US$1 million and $2 million compared with purchasing fuel at current market prices.
The Ministry of Finance is also intervening directly to prevent electricity bills from rising sharply.
Straughn said that from April 1, Government would absorb 50 per cent of the increase in the fuel clause adjustment above this month’s level for the next three months.
Without that intervention, the average household electricity bill would have increased by roughly $32 per month, he said.
Instead, Government will cover half of that increase, about $16, at an estimated cost of $7.9 million over the three-month period.
“This is the total price we are paying for the next three months to keep your electricity bill stable,” he told the House.
“Government is also working with Barbados Light & Power to introduce an off-peak electricity tariff for households. The proposed system would charge a higher fuel clause adjustment during peak demand periods and a lower rate during off-peak hours, encouraging consumers to shift energy use away from high-demand times.”
Straughn said the model was already used by large manufacturers and could help balance demand on the electricity grid while reducing reliance on expensive peak-power generation.
He also urged households and businesses to reduce energy consumption to help limit national fuel costs. (BA)