Tariffs for gasoline, diesel, and water decrease, electricity sees a slight increase

May 26, 2023  –WILLEMSTAD – Starting Tuesday, May 30, 2023, the regulated tariff for gasoline and diesel will decrease in Curaçao. The tariff for water will also decrease, effective Thursday, June 1, 2023. However, the electricity tariff will experience a slight increase. This information was reported by the Bureau of Telecommunications and Post (BT&P) in their monthly press release. The BT&P oversees the price developments of petroleum products and utilities. 

Fuel Tariff Calculation 

The tariff structure for Mogas 95, Gasoil LSD, LPG 20, and LPG 100 consists of the following elements: 1. Purchase price, 2. Import tax LSD, 3. Fuel supply assurance (1a), 4. Fuel supply assurance (1b), 5. Curoil margin, 6. Excise taxes, 7. Surplus/Deficit (Recovery), 8. Cross-subsidy, 9. Wholesale VAT 6%, 10. Dealer margin, and 11. Retail VAT 6%. Some elements may temporarily be subject to a zero rate. The wholesale tariff includes the first nine elements, while the retail tariff encompasses all elements. 

The purchase price, which serves as the starting point for the calculation, is determined monthly for the following month based on the available fuel inventory at the end of the previous month. Therefore, the purchase prices used for June 2023 are initially based on the available fuel inventory as of the end of April 2023. In case the inventory information provided by Curoil is insufficient, recent international price quotations are used as a reference.

These purchase prices are also compared to international price quotations. Through the “Surplus/Deficit” element, the differences between the regulated purchase price and the actual purchases in a given month are reconciled retrospectively due to this lag. 

The decrease in the end-user tariff for Mogas 95 is mainly the result of a substantial decrease in the purchase price and an increase in the correction within the surplus/deficit component. The decrease in the end-user tariff for Gasoil LSD is mainly the result of a decrease in both the purchase price and the correction within the surplus/deficit component. 

Tariff calculation for water and electricity 

The tariff structure for water and electricity consists of two components: the base rate and the fuel clause. The fuel clause for electricity consists of two elements: the purchase of electricity and fuel costs. 

The “purchases” are based on the price of energy supplied by third parties, such as wind energy and solar energy, while the fuel costs refer to the costs of energy generation by Aqualectra itself. 

Similarly, the fuel clause for water also consists of two elements: “purchases” based on the price of water supplied by a third party, and electricity costs for water production by Aqualectra itself. However, the utilization of different production resources, also known as the “production mix,” varies each month. Therefore, the fuel clause amount is determined monthly by BT&P based on Aqualectra’s forecast of the production mix for June 2023. 

If it is later determined that the component was too high or too low, it will be adjusted. In this case, it refers to the month of April 2023. The base 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, as well as all costs for distribution and supply, such as personnel costs, maintenance costs, depreciation, etc. 

The increase in electricity rates is the result of lower average fuel costs for electricity production due to a decrease in fuel prices, combined with the expected production mix (including a slightly higher share of wind energy and increased utilization of cheaper production facilities) and a higher corrective factor for April 2023. The decrease in water rates is the result of lower electricity costs for water production and a slightly lower corrective factor for April 2023. 

Approval and determination 

BT&P advises the Council of Ministers (RvM) on the new rates. Only after the RvM approves the proposal, the Minister of Economic Development, who is also responsible for energy affairs, determines the rates. These rates are then the maximum rates that can be applied for one month. Through this procedure, which takes into account international and local factors, regulatory body BT&P ensures the continuity and fairness of fuel, water, and electricity supply to the local population in an independent and transparent manner. 

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