There are further changes to the electricity tariff rates with an increase in rates in two phases for the commercial users while the households using 75 units of electricity or less will be subsidised by the government.
The announcement has been made this afternoon by Commerce Commission Chairman, Doctor Mahendra Reddy who said FEA will no longer subsidise FEA rates for lifeline customers and the government will now take care of the subsidies based on its assessment.
So for those using 75 units of electricity or less will pay a tariff rate of 17.2 cents per unit while the remaining amount of the market unit rate will be paid by the government to the FEA.
The change here is that under the previous tariff structure, FEA used to subsidise customers who used 130 units or less.
Commerce Minister, Aiyaz Sayed-Khaiyum said the government's direct subsidy will assist about 22,000 bill payers in the country.
The government will also subsidise all primary and secondary schoolsin the country.
Their lifeline rate is 20.59 cents, while the market rate is 34.84 cents.
The total subsidy is 3.5 million dollars.
It has also been confirmed that FEA will no longer get any concessions on duty for fuel and this would mean revenue of about 7 to 7.5 million for government.
Sayed-Khaiyum said they will also ensure that VAT is applicable across the board which will see an additional 3 million dollars in revenue for the government to carry out the subsidies.
Any household using more than 75 units of electricity will pay the market rate of 34 cents.
For the commercial sector, the FEA tariff rate increase is in two phases.
The first phase of increase kicks in on the 1st of November and the second increase starts in April 2011.
Doctor Mahendra Reddy said the commercial rate increases range from 10 to 40 percent and stresses that this is to align and structure tariff rates to modern times as this has not been done for years.
On the commercial rate, for those below 15 thousand kilowatt per month and currently paying a rate of 37 cents, will see an increase to 39 cents on the 1st of November and 41 cents on the 1st of April.
For those using more than 15 thousand kilowatts per month, they will pay 41 cents per unit in November and 43 cents from the 1st of April.
For the maximum demand side, the increase ranges from 6.9 cents to 12.1 cents per unit.
Doctor Reddy said energy is a vital resource for the development of any country and over the last two decades Fiji's electricity consumption has increased by 252 percent.
He said unfortunately non renewable energy sources have not kept up with these developments and Fiji is heavily relying on import of fuel which makes any country vulnerable.
He said their aim is to ensure electricity prices in Fiji are correctly priced and to also provide FEA a head start in making investments on renewable energy technology.
Doctor Reddy also said for the commercial sector, tariff rates have been low and below competitive countries and FEA has been producing and supplying electricity at a loss.
For the high end commercial users the rate of increase is from 10 to 40 percent.
Story by: Vijay Narayan
