WILLEMSTAD - Starting Tuesday, January 30, 2024, the regulated gasoline rate in Curaçao will increase, while the diesel rate sees a slight decrease. As of Thursday, February 1, 2024, the electricity rate will decrease, and the water rate will rise. This information comes from the Bureau of Telecommunications and Post (BT&P) in its monthly press release. BT&P oversees the price developments of oil products and utilities.
Fuel Rate Calculation:
The rate structure of Mogas 95, Gasoil LSD, LPG 20, and LPG 100 includes 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 duties, 7. Surplus/Shortage (Recovery), 8. Cross-subsidy, 9. Wholesale O.B. 6%, 10. Dealer margin, and 11. Retail O.B. 6%. Some elements may have a zero rate, either temporarily or permanently. The wholesale rate includes the first nine elements, while the retail rate encompasses all elements.
The purchase price, the starting point of the calculation, is determined monthly for the following month based on the available fuel stock at the end of the previous month. Therefore, the purchase prices used for February 2024 are primarily based on the available fuel stock as of the end of December 2023. In case the inventory information provided by Curoil is insufficient, recent international price quotations are used. These purchase prices are also cross-referenced with international price quotations. The element 'Surplus/Shortage' is used to settle the differences between the regulated purchase price and the actual purchases in a given month, compensating for this delay.
The end-user rate for Mogas 95 increases compared to the previous month, primarily due to a rise in the purchase price, mostly based on the recent upward trend in international prices. The slight decrease in the end-user rate for Gasoil (U)LSD results from a declining purchase price, partly based on a favorable procurement in early December, and an increase in the surplus/shortage component.
Water and Electricity Rate Calculation:
The rate structure for water and electricity consists of two components: the base rate and the fuel clause. The fuel clause for electricity comprises two elements: electricity purchases and fuel costs.
The 'purchases' are based on the price of energy supplied by third parties, such as wind and solar energy, while the fuel costs involve the expenses of energy generation by Aqualectra itself.
Similarly, the fuel clause for water also includes two elements, namely 'purchases' based on the price of water supplied by a third party and electricity costs for water production by Aqualectra.
However, the use of different production methods, known as the 'production mix,' varies each month. Therefore, BT&P determines the fuel clause's amount monthly based on Aqualectra's forecast for the production mix, in this case, for February 2024. If it turns out later that the component was too high or too low, it is adjusted. In this case, it concerns the month of December 2023.
The base rate for both water and electricity is determined once a year by BT&P. This rate covers all other (fixed) costs for electricity and water production, as well as all distribution and supply costs, such as personnel costs, maintenance costs, depreciation, etc.
The decrease in electricity rates results from lower average fuel costs for electricity production due to a decline in fuel prices, combined with the expected production mix and a lower corrective factor for December 2023. The increase in water rates is a consequence of higher fuel costs for water production and a significantly higher corrective factor for December 2023.
Approval and Determination
The 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 matters, 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, the supervisory body BT&P independently and transparently safeguards the continuity and fairness of the supply of fuel, water, and electricity to the local population.
