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‘Not ready yet to lift surcharge’
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Posted on Feb 04 2006
The Fitial administration is not ready yet to remove the 3.5-cent fuel surcharge being imposed by the Commonwealth Utilities Corp. on its customers.
Acting Gov. Timothy P. Villagomez said Friday that the leadership remains committed to lifting the surcharge but this may take some time.
“We’re still [committed] to get rid of the fuel surcharge. We’ll update you on that in the next month or so,” he said.
At this time, he said, “I’m more concerned about the CUC engines.”
Villagomez said repairs must be done on all engines to ensure that they work and generate power efficiently.
The Fitial-Villagomez tandem had promised during the campaign last year that once seated in power, they would do away with the fuel surcharge, which they had described as an “evil” allowed by the Babauta administration.
Gov. Juan N. Babauta had vetoed a bill, introduced then by Villagomez, which aimed to repeal the surcharge.
Babauta had warned that CUC continues to suffer from a financial crisis and to remove the fuel surcharge amid the rising costs of fuel would mean the collapse of the utility firm.
The CUC spends some $6 million in fuel a month, but it collects only about $4.1 million from customers. The government subsidy plus the fuel surcharge allows CUC to meet its monthly obligations.
Residential users currently pay 14.5 cents per kwh while commercial users pay 19.5 cent per kwh inclusive of the 3.5 cents.
CUC, however, reportedly generates power at 23 to 24 cents per kwh.
The fuel surcharge itself is not enough to bridge the gap, requiring the government to provide additional money every month.
Removing the fuel surcharge would mean that the government would have to shoulder all the fund shortage just so CUC can continue producing power.
