Reinstate duty concession on fuel: FEA

The Fiji Electricity Authority (FEA) is urging Government to reinstate its duty free concession on imported fuel and allow the fuel surcharge to be put back in place.

The Authority said reinstating the duty concession would come at a small cost for the State at $4 million.

FEA was given some concession in 2003 for diesel fuel oil it was importing around the time.

It lost this concession some time this year followed by a partial restoration.

FEA chairman Nizam Ud-Dean called for the full restoration of this concession as FEA is heavily reliant on fuel oil at this stage for power generation.

He said the Authority also needed the State to allow the fuel surcharge mechanism to be put back in place.

He said at present, the Commerce Commission had approved a research on a fuel surcharge and a framework template put in place “that allowed us (FEA) to crack the rising fuel cost and keep the FEA’s head above water”.

 “Because the fuel surcharge mechanism has been stopped, FEA is losing a lot of money for which it has got to borrow to get the funding done for bridging finance,” Ud-Dean told participants at the recent Prime Minister’s mini-economic summit.

“Just to put it in perspective, every one cent in per unit income at FEA translates into $7 million per year. So when you remove one cent from us somewhere in the tariff that is a big impact. The one cent tariff rise that was supposed to have come into effect on January 1, 2007 which has now been given to us, cost us $12 million,” he explained.

“We had to borrow that money to bridge the gap.”