WILLEMSTAD - From Tuesday, August 3, 2021, the regulated rate of gasoline will increase and the rate of diesel on Curaçao will decrease. The rate of electricity has increased since Sunday, August 1, 2021 and the rate of water has decreases. 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.
Fuel products rate calculation
The tariff structure of Mogas 95, Gasoil LSD, LPG 20 and LPG 100 knows the elements:
1. Purchase price, 2. Import tax on LSD, 3. Guarantee fuel supply (1a) 4. Guarantee fuel supply (1b) 5. Margin Curoil, 6. Excise duties, 7. Surplus/shortage (Recovery), 8. Cross subsidy, 9. Wholesale O.B. 6%, 10. Dealer Margin, and 11. Retail O.B. 6%. For some elements – temporarily or otherwise – the zero rate applies. The wholesale rate includes the first nine elements while the retail rate includes all elements.
The purchase price, with which the calculation begins, is determined monthly for the following month, based on the available fuel supply at the end of the previous month. So: the purchase prices used for the month of August 2021 are in principle based on the available fuel stock at the end of June 2021. In case the stock information provided by Curoil is insufficient, recent international price quotations are used. These purchase prices are also checked against international price quotations. Due to this delay, the differences between the regulated purchase price and the actual purchases in a particular month are always settled afterwards via the 'Surplus/Deficit' element.
In line with international developments, purchase prices for both Mogas 95 and Gasolie LSD are rising. Furthermore, a (further) reduction of the 'fuel supply guarantee 1b' component is implemented with a view to the implementation of ISO containers for the distribution of LPG, resulting in a less expensive solution for guaranteeing the fuel supply. This leads to a decrease in the retail price for LSD and an increase in the retail price for Mogas due to the higher purchase price.
Water and electricity rate calculation
The tariff structure for water and electricity has two components: the basic tariff and the fuel clause. The electricity fuel clause consists of two elements: electricity purchase 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 relate to the costs of energy generation by Aqualectra itself. The fuel clause for water also consists of two elements, being 'purchased' based on the price of water supplied by a third party and electricity costs for water production by Aqualectra itself.
However, the deployment of the different production means varies every month, also known as 'the production mix'. The level of the fuel clause is therefore determined monthly by BT&P based on Aqualectra's forecast of what the production mix will be, in this case for the month of August 2021. If a month later it appears that the component was too high or too low, it will be corrected. In this case, this concerns the month of June 2021.
The base rate for both water and electricity is determined by BT&P once a year. This rate includes all other (fixed) costs to produce electricity and water and all costs for their distribution and delivery, such as personnel costs, maintenance costs, depreciation, etc.
The increase in electricity tariffs is the result of higher fuel costs to produce electricity due to increased fuel prices and the forecast production mix as well as a higher correction factor over June 2021. The decrease in water tariffs is the result of lower costs to produce water as a result of the forecast production mix and a higher correction factor for June 2021.
Approval
The 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, determine the rates. These are the maximum rates that may be used for a month. With this procedure, which takes international and local factors into account, 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.