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SUVA, Fiji (Fiji Times, August 31) – Fiji consumers will be paying 30 percent more for electricity in a fortnight's time.

It comes after the Commerce Commission approved a fuel surcharge for the Fiji Electricity Authority, which had cited losses due to increasing diesel costs.

Authority chief executive Rokoseru Nabalarua said they had no choice but to introduce a fuel surcharge of 6.5cents per unit.

Mr Nabalarua said the fuel surcharge would apply to all customers from September 15.

"The FEA has got no choice but to introduce the fuel surcharge approved by the Commerce Commission in order to continue to supply power continuously to its customers,'' he said. "The diesel cost to FEA is dramatically over 200 percent over the last four years."

Mr Nabalarua said the way things were going, by the end of the year fuel costs would probably be over 300 per cent because of the unprecedented increase in electricity demand of nearly 7 per cent each year and an escalation in diesel prices worldwide.

He said it cost FEA 34 cents to generate each unit of electricity with diesel but the tariff was set at 22 cents a unit.

He said this created a critical financial situation for the authority because almost 50 per cent of electricity demand was currently supplied though diesel-generated sources.

He said the FEA had absorbed escalating diesel costs over the past two years because a 2004 tariff increase approved by the Commerce Commission was not enough to offset costs.

But Mr Nabalarua said the authority would provide an incentive for customers to conserve electricity to reduce their bills. He said the authority would provide a 10 per cent discount for customers who could show a 10 per cent or more average decrease in electricity use over September, October and November.

He said the average for the next three months would be compared to that of June, July and August to determine which customers were entitled to discounts.

"It's a way to for us to be able to help our customers reduce their usage and also try to absorb some of this impact of this fuel surcharge," he said.

He said the fuel surcharge would remain in some form until diesel prices went back to around $756 per tonne.

In its submission to the Commerce Commission, FEA had justified the rise because of the $1300 a tonne it is paying for diesel now. Mr Nabalarua said that $1300 a tonne was the duty-free cost of diesel.

Prime Minister Laisenia Qarase preferred not to comment on the issue.

Energy and Mineral Resources Minister Lekh Ram Vayeshnoi said the Commission and the Authority should answer to the matter.

The Commission is expected to respond to questions faxed to it today.

Consumer Council chief executive Premila Kumar said the fuel surcharge would further exacerbate the difficulties faced by consumers.

"Any price increase at the global level will definitely have an impact on us. FEA should now focus more on increasing renewable energy sources such as wood, bagasse, hydro, coal, solar and wind turbines as a cheaper alternative," she said.

Fiji Retailers Association president Himmat Lodhia said the new charges would kill the small businessmen.

"In approving such hikes in prices, the commerce commission is certainly not looking at the plights of the small businessman and the general consumer.

"Everyone is not sitting on plum jobs to be able to afford all these unnecessary hikes," he said.

He suggests that the increase in charges be deferred by at least six months.

"We sincerely hope that the Government would step in now, and protect the consumer and the small to medium business enterprises," he said.

The Fiji Visitors Bureau said the cost of oil would continue to increase and Fiji must commit to finding alternative sources of energy instead of waiting for fuel prices to fall.

Fiji Council of Social Services executive director Hassan Khan said the surcharge was yet another example of blatant disregard of public consultation process.

"The fact that it is being disguised as fuel surcharge is not only hypocritical but a deception of the highest order," he said.

"The elected members of Parliament should be the front line people to oppose such increases because just a few months ago they made solemn promises to reduce poverty and hardship amongst citizens of Fiji.

"It is most disappointing to note that this has been approved by the Commerce Commission without calling for public submission as it was rightly done in the case of telephone charges," he said.

He called on the Social Welfare Minister George Shiu Raj to stand up for the poor and take the bold step and raise the family assistance allowance to $120per month.

Fiji Islands Hotels and Tourism Association chief executive officer Mereani Korovavala said they recognised the demand placed by the Authority to generate energy because of factors that may well arise outside their control and the role of the Commerce Commission.

"The fact remains that this increase will make Fiji a much more expensive destination than what it already is," she said.

August 31, 2006

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