geisha.kowlessar@guardian.co.tt
Increases in electricity rates can very likely result in the higher cost of groceries says President of the Supermarket Association of T&T (SATT) Rajiv Diptee.
Diptee said supermarkets are already burdened with exorbitant overhead costs with electricity being a major one, and therefore a rate increase will only add to the situation.
The Regulated Industries Commission (RIC) has proposed rate increases for the T&T Electricity Commission (T&TEC) over the next five years.
The proposed rate increases for residential customers range from 15 per cent to as high as 64 per cent, based on kilowatt consumption.
For example, 200 kW usage for the current billing cycle of a residential customer would cost about $58. Under the suggested rates, it would be $71 over two months or $35.50 per month, versus the current cost of $29.
Commercial customers will see percentage increases ranging from 51 per cent to 63 per cent. A commercial customer using 500 kW currently pays $232.50. Under the proposed rates, these customers would pay $380 or $190 per month.
Diptee is suggesting that a hike ought to be done incrementally as citizens and the country’s economy still recovers from COVID.
“You are going to have a situation where retailers especially in supermarkets where there’s a heavy consumption of electricity because of items like cold storage, in particular, this is going to bloat their cost of operation...you have to wonder what is going to be the impact, especially from the suppliers to supermarkets and then to the customers.
“Everybody’s cost of operation is going to be affected and they are going to consider first, how is this going to affect the prices. This is something that is going to affect us all in the short and medium term... it can definitely have an impact,” Diptee explained.
He further explained this impact, however, starts with the supply chain, noting distributors and manufacturers will also be affected by electricity rate hikes.
“It’s going to be a case where how does this affect the overall operations. If it creates an inflationary environment it is something we have to examine but there’s a potential for that,” Diptee advised.
Added to this are other factors like global challenges such as increased freight costs and the latest being a resurgence of COVID cases in China which can further exacerbate the situation.
Also, the SATT President said the ongoing war in Ukraine continues to pose problems worldwide by creating further inflation.
Noting that consultations will play an instrumental role going forward Diptee said what must be taken into consideration is that people are still trying to catch themselves financially.
“We have heard it from the grassroots, from the citizens, from the customers that they are still recovering from two years of lockdown. Give them time to recover.
“That also applies to the retailers because all the retailers of commercial operations will be affected. We know rate increases will come but perhaps they will be incremental or staggered in a more suitable manner,” Diptee added.