Energy Fiji Ltd’s bid for a 17.6 % increase in electricity rates is unwarranted and must be strongly resisted, says Fiji Labour Party Leader Mahendra Chaudhry.
“Such a substantial increase will have a debilitating impact on the economy. It will further fuel inflation and raise the cost of all goods and services across the board,” Mr Chaudhry said.
“None of the ten reasons advanced by EFL in its submission to the Fiji Competition and Consumer Commission (FCCC) can withstand scrutiny in light of the profits it has been making,” Mr Chaudhry said.
EFL’s after tax profit for the three years to 2017 were: $40m (2015), $60m (2016) and $67m in 2017 – 2018 report is yet to be released. Is an increase in rates justified given the profits it has been making?
As it is, the people are going through very hard times. Businesses are experiencing a worrying down turn. Energy costs constitute a large part of business as well as household expenditure. Businesses will not be able to absorb the increased costs and will be forced to pass it on to their customers.
EFL must realize that it is the provider of an essential service. It has a role to play in society, and the economy. It should not look at itself as a private profit-making company. Its role is to provide affordable and reliable energy to households and businesses.
Mr Chaudhry criticized the $29m paid to government this year as dividend, rejecting the premise that government must get a return on its investment and was therefore entitled to part of EFL’s profits.
“There is negligible government investment in EFL. The consumers are its rightful owners, not the government. Profits must therefore be passed on to the consumer through tariff reductions,” he said.
Labour suspects that this tariff hike bid is a first step in the FF government’s plan to prepare EFL for privatization.
“Faced with the critical state of government finances, and the possibility of a continuing downturn in the economy, it needs to raise quick cash to survive.
“But before it can get the private sector to take a serious look at acquiring shares in EFL, the government must satisfy their expectation for an attractive tariff structure which guarantees them good returns,” Mr Chaudhry said.
“We call on all people-based organisations, particularly trade unions, NGOs and businesses to make informed submissions to FCCC opposing the proposed increase.
“We urge our MPS in the Opposition to take a strong stand in the matter, holding public consultations on the issue around the country,” said Mr Chaudhry.