First oil is just around the corner but high energy costs remains a concern for the manufacturing sector; with a Private Sector Commission executive expressing the need for more measures to bring down the costs.
In an interview with this publication on the sidelines of a workshop on Monday, PSC Executive, Ramesh Dookhoo shared his thoughts on the budding oil and gas sector, noting that price fluctuations and the high cost of fuel prohibits Guyana from being competitive with other countries.
“We still have a huge challenge as a manufacturing country, with the cost for electricity. I would urge the Government to continue to look for sustainable supplies and initiatives in energy. Fluctuations that govern the price of oil affect us and put Guyana in a place where we’re not competitive to export and compete with countries that have cheaper energy,” Dookhoo told this publication.
Renewable energy
He expressed the need for renewable energy like hydropower to be integrated into the system so that costs can be lowered. He also cited the previous Government’s approach of adjusting the excise tax in order to stabilise prices for the consumers.
“The way I see it, we either do hydropower or set up other systems or we will be in the same position ten years from now. There is talk about getting some of the gas here. I don’t know how much it will cost.”
“There has been a call by manufacturers to the Government to try and adjust the duties. Most of the diesel prices have gone up tremendously. What the previous Government did was adjust the duties so that the price could be stable and predictable,” he said.
According to Dookhoo, this practice seems to be abandoned by the current Government. Notwithstanding this, the executive was hopeful that other ways of reducing the cost of fuel will be pursued.
Oil and energy
Only Sunday, prominent Attorney-at-law Sanjeev Datadin gave a presentation in which he expressed concern about Guyana’s lack of preparedness for first oil. This shows, according to Datadin, in the lack of new legislation to regulate the sector.
Many have expressed the need for clear measures to be articulated that would see ordinary Guyanese benefitting directly from the sector. One such expectation has been cheaper electricity.
In addition, experts have previously projected that with the advent of the oil and gas sector, Guyana may face a situation where there is a high demand for energy and as a consequence, oil prices will rise. At the same time, they have expressed concern over the higher than usual price being paid by consumers.
This observation was made by a representative of the Global Green Growth Institute (GGGI), Carol Litwin, when she was in Guyana for a workshop in March of last year. Litwin had also observed that the price commercial and business class consumers pay for power in Guyana is an abnormal one, considering the unreliable supply of energy.
“I see a sector dependent on heavy fuel oil or diesel,” she related. “I see a sector that is not always able to provide quality of supply. You have been growing at about five per cent, but that’s going to change. With oil and gas, it is quite likely that your demand is going to double over the next five to eight years.”
“At the same time, as the quality of supply is not always there for customers, the prices are extremely high. They can be as a much as 30 to 33 US cents for commercial and industrial consumers. This is considered as one of the higher end countries,” she had said.
In Guyana, the Guyana Power and Light’s (GPL) Demerara interconnected system is fed with power by the Power Producers and Distributors Inc (PPDI), which replaced Wärtsilä, a company from Finland which for two decades maintained over a dozen engines for the utility company.
