An Inter American Development Bank [IDB] consultant is continuing to work with energy officials and special interest groups to help the government craft a National Energy Policy, considered one of the most important projects for The Bahamas.
Volatile oil prices represent a continued threat to stabilizing the cost of doing business in The Bahamas. Rising international oil prices this year caused a 55.6 percent upsurge in the value of oil imports and not because the volume increased, but the cost of the commodity.
The Bahamas Chamber of Commerce, the association that represents local businesspersons, is also being sourced for input on the proposed energy policy.
“[The discussions] are critical [and] it’s probably one of the more important policies that we will discuss for years to come as it relates to the cost of doing business and the cost of energy today and looking into the future and hopefully the utilization of alternatives,” said Phillip Simon, Executive Director of the Chamber.
“The Chamber [is being] used as a resource to provide feedback from its membership; the business and the wider community to maybe assist with the development of accompanying legislation and the review that will happen.”
The consultations are at a relatively early stage. Chamber officials have been involved in several meetings so far as work progresses.
Even the International Monetary Fund [IMF] acknowledged recently that higher world oil prices have placed a difficult burden on a number of countries in this region.
“While oil prices have recently fallen sharply, they remain high by historical standards and the oil market is expected to remain tight and volatile,” the IMF said in a report which upgraded the projection for economic growth in Latin America and the Caribbean.
“Moreover, non-fuel commodity prices are projected to begin a gradual decline in 2007.”
Central Bank analysts reported too that although those rising prices in the value of oil imports caused a big upsurge in the value of oil related imports, it was combined with a modest 2.6 percent expansion in non-oil imports. It caused a deterioration in the merchandise account deficit by 8.1 percent to $537.6 million.
In the external sector, the escalation in fuel costs combined with heightened import demand resulted in a near doubling of the current account deficit in the first half of the year. This happened while increased investment flows for tourism related projects led to a modestly higher surplus on the capital and financial account.
Slightly less than $158 million was spent on oil imports in the first quarter of this year, demonstrating the extent to which the country is dependent on the commodity.
The $157.9 million spent on the oil trade between January and March is in comparison to the $91.8 million spent in the first quarter of 2005, according to the findings of the Central Bank.
In the last quarter of last year $156.8 million was spent, the report found. Officials continued to keep an eye on how the oil import bill was impacting the balance of payments.
Locally consumers were bracing for higher electricity bills as the Bahamas Electricity Corporation announced that the fuel surcharge was going up slightly.
The fuel surcharge for September is pegged at $10.8217 per kilowatt hour as opposed to the $10.6988 that was charged for the month of August. Last September’s fuel surcharge was $8.4892.
By: Tameka Lundy, The Bahama Journal
