Utility concerned about high HFO prices

Chairman troubled by one-year high prices despite the recent fall in the price of crude.

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Updated on 20 Oct 2011 09:44 GMT

Bahamas Electricity Corporation (BEC) chairman, Michael Moss [pictured], has said that in September the company paid the highest price so far this year for its heavy fuel oil supplies.

Speaking to Tribune Business, Moss said: "In September we paid a higher price for automotive diesel oil (ADO) and Bunker C or heavy fuel oil (HFO), the highest price we had paid in any month since last year October."

"I'm not sure what market aberrations are taking place that are keeping the price of these two so high. We did not expect that; we expected the price to be moderating. We are still hopeful that the declining trend will come, it's just not evident as yet."

According to the utility, the HFO per barrel price paid last month was up 47.6 per cent on September 2010.

Moss noted: "In October of last year for heavy fuel oil, I was paying a price of $75.94 per barrel. This year September I paid $112.06 per barrel for that heavy fuel oil. For diesel in October of last year I paid $95.70 per barrel. In September I paid $151.32 per barrel."

Despite the fact that oil prices have hit one-year lows in recent weeks, Moss said: "We continue to look expectantly for a moderation in prices; it's just that we haven't seen it as yet.

"While the price of product does have a linkage to the price of crude, they don't necessarily follow the price of crude. If you look historically, gasoline prices go up in the summer regardless of what happens with crude, and go down in the winter. That is more about supply and demand."