WILLEMSTAD - From Tuesday, March 30, 2021, the regulated tariff for petrol and diesel on Curaçao will increase. The rates for electricity and water will also increase with effect from Thursday 1 April 2021. The Bureau Telecommunication and Post (BT&P) reports this in its monthly press release. BT&P monitors the price developments of oil products and utilities.
Increase in international price quotations for oil and fuels
As previously announced by the BT&P, since November 2020 there has been a strong continuous rise in the international price quotations for both crude oil and refined fuels.
The graphs below illustrate this development, with increases of approximately 55-75% since November 2020.
These developments have resulted in increases in fuel tariffs internationally. In Curaçao too, these increases will lead to an increase in the rates for fuels and utilities in the coming month (s).
Rate calculation for fuel products
The tariff structure of Mogas 95, Gas oil LSD, LPG 20 and LPG 100 has the elements 1. Purchase price, 2. Import tax LSD, 3. Guarantee fuel supply (1a), 4. Guarantee fuel supply (1b), 5. Curoil margin, 6. Excise duties, 7. Surplus / Deficit (Recovery), 8. Cross-subsidy, 9. Wholesale OB 6%, 10. Dealer margin, and 11. Retail O.B. 6%. For some elements, the zero rate applies - temporarily or otherwise. The wholesale rate includes the first nine elements while the retail rate includes all elements.
The purchase price, which starts the calculation, is determined monthly for the following month based on the available fuel stock at the end of the previous month. So: the purchase prices used for the month of April 2021 are in principle based on the available fuel stock at the end of February 2021. If the stock information provided by Curoil is insufficient, recent international price quotations will be used. The purchases by Curoil are also tested against the international price quotations. Due to this delay, the differences between the regulated purchase price and the actual purchases in a certain month are always settled afterwards via the element 'Surplus / Shortage'.
The end-user tariffs for Mogas 95 and Gasoil LSD will increase in April 2021 mainly due to a substantial increase in purchase prices. This is the result of the development of international oil and fuel prices shown above.
Tariff calculation for water and electricity
The tariff structure for water and electricity has two components: the basic tariff and the fuel clause. The fuel clause for electricity consists of two elements: purchasing electricity and fuel costs.
The "purchases" are based on the price of energy supplied by third parties, such as wind energy and solar energy, and the fuel costs concern the costs of energy generation by Aqualectra itself. The fuel clause for water also consists of two elements, namely "purchases" based on the price of water supplied by a third party and electricity costs for the water production by Aqualectra itself.
However, the use of the different means of production varies every month, also called "the production mix". The level of the fuel clause is therefore determined monthly by BT&P on the basis of Aqualectra's forecast of what the production mix will be, in this case for the month of April 2021.
If later it turns out that in a month the component was too high or too low, it will be corrected. In this case, this concerns the month of February 2021. The basic rate for both water and electricity is determined once a year by BT&P. This rate includes all other (fixed) costs for the production of electricity and water and all costs for the distribution and delivery thereof, such as personnel costs, maintenance costs, depreciation, etc.
Electricity and water tariffs increase mainly due to higher fuel costs for the production of electricity and higher electricity costs for the production of water, respectively.
Approval and adoption
BT&P advises the Council of Ministers (RvM) on the new rates. Only after the RvM approves the proposal, does the Minister of Economic Development, who is also responsible for energy matters, set the rates. These are the maximum rates that may be used for a month. With this procedure, which takes into account international and local factors, regulator BT&P monitors the continuity and fairness of the supply of fuel, water and electricity to the local population in an independent, transparent manner.