$4M hole

NPC operating at a loss, says Boyce

Minister with responsibility for Energy Senator says the National Petroleum Corporation (NPC) is seriously in the red, and having recorded $2 million in total losses over the past two years, the state owned entity is headed for an even bigger shortfall this year.

“That would happen if there were no rate increase,” Boyce said as he sought to justify Government’s planned hike in domestic natural gas rates.

In piloting the National Petroleum (Amendment) Bill 2017 through the Upper House today, Boyce revealed that the NPC, which is currently indebted to its local supplier – the Barbados National Oil Trading Company Ltd – to the tune of $12 million, had registered a loss of $1.2 million in fiscal 2015/2016 and a further shortfall of $800,000 in 2016/2017. That figure is expected to rise to $4 million for 2017 to 2018.

Boyce said the statutory entity was currently caught between a rock and a hard place, charging cheap, decades-old rates for a rapidly dwindling supply of its products, while facing rising import costs.

“The rates charged by the National Petroleum Corporation are exceedingly low rates,” the energy spokesman said.

“At the same time the cost of natural gas that we supply has trebled since 2002. And the amount of natural gas that we have in the country has declined consistently since the early 2000,” he added.

The minister further reported that the natural gas supply taken from wells across the island had see-sawed in the 1980s, before stabilizing in the 1990s due to more well-drilling and oil finds, and then falling again.

He said the effects of this downward spiral had seriously hit home to Barbadians during the 2014 Christmas season when the tourism industry, especially hotels and west coast restaurants, along with some industrial plants, lost their supply, owing to low pressure.

This had forced officials to fast track a plan for the importation of natural gas at “five times the cost of the local natural gas”, according to Boyce.

“We are at the stage where we will soon have to import almost half of the natural gas that we have to supply,” he told the Senate.

In the meantime, Government is awaiting approval of a multi-million dollar loan by the Inter-American Development Bank (IDB) to pursue a major natural gas project in conjunction with Barbados Light & Power Company Limited.

Boyce said staff in his ministry were currently working towards a sign off by the end of June, so that the project could begin by early next year.

“We are therefore pursuing our discussions with the [Barbados] Light & Power company about the use of natural gas for power generation instead of the heavy fuel oil, the Bunker ‘C, so that we can get the gas [cost] down and we can now import the gas at much larger quantities,” Boyce said.

According to the IDB, the US$34 million loan will assist the island in improving its energy security and diversifying its energy mix.

The project “will finance improvements to Barbados’ existing natural gas infrastructure to ensure natural gas service continuity . . . . It will also enable the implementation of a public-private partnership project to import and supply LNG for power generation as well as to provide technical support to NPC/BNOCL to foster greater operational efficiency”, the IDB said. 

8 Responses to $4M hole

  1. Peter May 18, 2017 at 9:32 am

    What a choice? Boyce nor McClean NEVER contested a seat electively at the polls, Yet they are selected to serve as parliamentarians and be ministers. All this because they are strong DEMs party supporters. All that will end come next year. Imagine a parliamentarian who doesn’t know the difference between Physical and fiscal yet claims to be a financial guru..

    Reply
  2. Alex Alleyne May 18, 2017 at 10:07 am

    If you guys keep raising everything then will you please give us a TAX FREE week end once per month on FOOD.
    I know you all get big money per month plus you go “beg” for everything and get it plus we give you an entertainment levy and you collect . You don’t spend a penny of your money but continue to clean us out every budget day. DO YOU ALL HAVE A HEART or you just say to us “grin and bear it”. Man this is the finger without the LUBE.

    Reply
  3. hcalndre May 18, 2017 at 10:53 am

    Ever so often there is some kind of “Bait and Switch” game that this government is playing on the people to get the economy moving, eg. the Solid waste tax, the Cahill project, the Water meters installment, the Soda tax claiming that less people would become diabetics and now its the natural gas that they want to make the people pay more on their bills, is this going to increase the flow of the gas? Nothing seems to be working for them.

    Reply
    • jennifer May 18, 2017 at 11:19 am

      @hcalndre – The masses have to be the game, if not then who???? There is no one else. Why would the government do any less when the masses spending remains the same or appear to be improving.
      @Alex – oh yes. Just grind and BEAR.

      Reply
  4. Helicopter(8P) May 18, 2017 at 11:26 am

    It would be great business if such operations in Barbados stop peeping through the curtains with their financial statements and bring up to date transparency to the general public in a democratic society on time. That would be fairness. A situation such as quantitative supply should be forecast and planners utilize the best principals in acquiring an alternative with a smooth progressive cost transition!

    Reply
  5. Milli Watt May 18, 2017 at 1:33 pm

    this can’t be the same utility you help sell to canadian company EMERA which btw you refused to extend the monopoly and you now begging a favour. FYI the steam units at spring garden suspended the burning of natural gas for reasons I won’t go into now and the retrofit to existing assets will mean a substantial investment. It is really painful listening to you all and what burns me is that you are all being paid a substantial amount from the publiv purse. ssstttuuuuppppsssseeeeeeeeeeeeeeeeeeeeeeee do the math boyce the answer is no re BL&P importing and customers will have to face a substantial increase

    Reply
  6. Greengiant May 18, 2017 at 11:52 pm

    Remember this said Darcy Boyce served in the ministry of fi ance under a previous administration. So if you have a problem with him, then you should also have a problem with your alternative government too @Peter. Some who face the electorate seem not to have a clue, so what’s the problem if persons not elected, but have the qualification, knowledge, and experience heads a ministerial portfolio.

    We have to get pass this stage of our development. I will ask this question. What are lawyers qualified, trained, and experienced to do? Yet they have headed different ministries when elected.

    Reply
  7. Tony Webster May 20, 2017 at 5:16 pm

    Hmmm….with a
    L these “holes” we might usefully seek the Advice of our Respected Auditor (enteral, as to what we might best plant in them: bananas? Golden Apples ( that has a nice appeal; how about River Tamarinds, to fuel the new mutifarcical Andrews Factory.
    If all else fails, we are left with two further options;-
    1 take all files,cellphones, laptops that might have inconvenient /incriminating evidence, and carefully place in all such hole. Yes, including Plasmatic M.O.U.’s. Some such trees, might “make your eyes grow”..(sorry). dem gine be so big!
    2. Dig down even further, and collect tanks of surface “run-off” water.
    Shame on you…you always thought I was a nay -sayer!

    Reply

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