Barbados is hedging against rising oil prices again in an effort to shield consumers from higher electricity bills.
Officials of Barbados Light & Power Company (BLPC) say that the heavy fuel the company purchases on contract from the state-owned Barbados National Energy Company Limited (BNECL) has been locked in at a fixed price for the second time in recent months.
This comes as BLPC reports that its customers have been spared approximately $150 million in fuel-related costs since the company’s Clean Energy Bridge (CEB), a 33-megawatt medium-speed diesel generation plant, was commissioned in June 2022 at Trents, St Lucy.
While delivering the Budgetary Proposals in March, Minister of Finance Ryan Straughn announced that “on Government’s . . . , our national fuel BNECL, has locked heavy fuel oil, which electricity generation, per barrel for the next “That hedge is already Barbadian households approximately US$ of heavy fuel oil we electricity generation,” pointing to savings On Wednesday, BLPC of operations Johann its purchase of heavy BNECL was now benefiting second fuel hedge arrangement.
“We have now exhausted hedge of 240 000 barrels They have entered hedge where they committed buying another 240 at $85 a barrel,” he Government’s instructions fuel importer, locked in the price of which powers our generation, at US$92 next three months”. already saving households and businesses US$4 on every barrel import for generation,” Straughn said, of US$1 million. BLPC vice-president Johann Greaves said heavy fuel oil from benefiting from a arrangement. exhausted that first barrels at US$92. into a second committed to 240 000 barrels said.
“So the . . . heavy fuel oil that we are buying now is indexed at US$85 a barrel for what we purchase. If you look at the price on the world market today, earlier this morning I saw US$97 to US$98 a barrel. So, therefore, the savings right now is between US$12 to US$13 per barrel that we are actually consuming to generate electricity.”
Greaves said electricity costs paid by consumers were also minimised.
“The Clean Energy Bridge has derived fuel savings from the time that it was placed in service. The Clean Energy Bridge plant burns heavy fuel oil, which is the cheapest fuel. If we did not have that plant, the electricity that would be generated from that station will have to be generated on the gas turbines that burnt aviation fuel, or the units that burn diesel as well.”