SXMElections.com

PHILIPSBURG, St. Maarten - In light of a continuous decrease in oil prices globally, GEBE is now taking steps to decrease the fuel clause.

In a press release issued on Wednesday, management of the company said that "the trickledown effect of these decreases takes an average 45 days before consumers can enjoy some much-needed relief.

This means based on present trends, by February's billing period, consumers will experience further relief." "The main objective of GEBE is always to ensure that the fuel clause is as low as possible," GEBE Chief Operations Officer and Managing Board President Romelio Maduro said.

According to data provided, prices have dropped and will continue to do so. During the year 2014, GEBE listed the July price as 0.375 NAf./kWh, August as 0.366 NAf./kWh, September as 0.360 NAf./kWh, October as 0.338 NAf./kWh, November as 0.318 NAf./kWh, and December as 0.2648 NAf./kWh. "We operate the power plant as efficiently as possible using heavy fuel oil (HFO) to keep costs down and we balance this with effective monthly collection of revenues to maintain a sound operating capital," he said.

In reply to consumer curiosity based on rapidly dropping international prices GEBE said, "The challenge with the windfall from the reduced energy price on the world market is timing and that translated means that the St. Maarten consumer cannot suddenly see the benefit."This is largely due to the company's limitation when it comes to storage of fuel it needs to operate monthly.

Fuel purchased in a given month is delivered and booked at a set price quoted on the date of purchase. "This means that the utility company's operating cost will be based entirely on that amount booked and the net sales derived from it.

If after that purchase date the price suddenly falls, it will have no effect until GEBE makes its next purchases in order for the company to have an opportunity to offer some relief to its consumers.

"Purchased fuel takes a few days to be delivered to St. Maarten via ocean, and when it arrives it is stored for 15 days maximum at fuel supplier St. Maarten, as there is presently no storage alternative to allow larger or unscheduled purchases and deliveries."Besides this, all consumers also pay their bills the following month, which adds up to the 45 days.

When this fuel is finally used to generate energy, the consumer pays based on that price as it is calculated in the fuel clause. "The fuel clause is total fuel and lubricant cost per month – at the time of purchase – divided by the monthly net sales. However, that net sales is only determined at the end of a consumption period and this is then billed to consumers."

Other factors affecting the fuel cost include shipping to St. Maarten. These all form part of GEBE's direct expenses which the company said it offsets only by the collected revenue, the Water and Electricity Company said.