Rising Global Oil Prices Impacting Electricity Fuel Costs

The Barbados Light & Power Company Ltd. (Light & Power) is closely monitoring global oil markets, as ongoing conflict and instability around the world continue to impact the cost of fuel, transportation and other essential services. These global pressures are now being felt at home in Barbados, increasing the cost of the fuel used to generate electricity, and in turn affecting customers’ bills.

In Barbados, 80% of electricity is generated using fuel purchased on the international market. As a result, changes in global oil prices are reflected in the fuel portion of electricity bills. In recent weeks, the price of West Texas Intermediate (WTI) crude oil increased from US $64 per barrel last month to significantly higher levels earlier this week, before falling back to around US $87 per barrel.

Movements in international oil prices affect the cost of fuel purchased during the month, and customers will start to see this impact in the Fuel Clause Adjustment (FCA) during March. The FCA has increased from 28.9949 cents per kilowatt hour in February to 35.8256 cents per kilowatt hour in March. The March FCA was calculated using a WTI price of US $75 per barrel at the time it was set. For an average household using 250 kilowatt hours of electricity, this represents an estimated increase of about $17 on this month’s bill.

The FCA is not a new charge. It is a standard component of the electricity bills and represents a direct passthrough of the actual cost of fuel used to generate electricity, with no markup added by Light & Power.

“We understand that many households and businesses are already managing higher costs, and any change in electricity bills adds to that pressure,” said Johann Greaves, VP Operations at Light & Power. “With global oil prices remaining volatile, we know these changes are challenging. That is why we remain committed to tracking global conditions closely and communicating with customers as early and as clearly as possible, so they can plan, and make informed decisions during this period.”

While global events remain outside of Light & Power’s control, the company continues to operate efficiently and to support national efforts to reduce Barbados’ long‑term exposure to international fuel price shocks through a more diversified and sustainable energy mix.

In the near term, customers may be able to reduce the impact these global pressures have on their monthly bills by making small practical changes in electricity use, particularly in relation to high-use appliances.