Electricity hike will drive up food prices, Penn warns
Opposition Leader Marlon Penn has warned that the government’s decision to increase electricity charges for high-usage consumers will raise operating costs for supermarkets and lead to higher food prices across the Virgin Islands.
The House of Assembly was debating an amendment to the electricity tariff structure that removes the fuel subsidy for consumption above 1,500 kilowatt-hours per month. Communications and Works Minister Kye Rymer said the measure would directly affect about five per cent of customers, with charges rising only on electricity used above the threshold.
Penn said that group included some of the territory’s major supermarkets and food importers. He argued that the number of businesses directly affected did not reflect the measure’s wider impact on consumers.
“That small percentage has a large role to play in the economy,” Penn argued.
He said businesses would not simply absorb the additional operating expense while continuing to sell goods at existing prices.
“Someone has to absorb that new cost, and it’s going to be us… The consumers are the ones who are going to be left to absorb that new cost,” Penn stated.
Penn acknowledged the financial difficulties facing the BVI Electricity Corporation and commended its staff and management for maintaining a consistent electricity supply. However, he described the tariff change as an inadequate response to the corporation’s financial position.
“It’s a band-aid on a gaping wound,” Penn stated.
Rymer told the House that BVIEC subsidised customers by $13 million in 2025 and was projected to provide more than $14 million in subsidies during 2026. He said the amendment aimed to reduce that burden and improve the corporation’s ability to meet its operating and capital expenses.
Penn instead called for a comprehensive plan to address BVIEC’s finances and protect families already struggling with electricity, food, clothing, and back-to-school expenses.
The government provided relief as fuel prices rose earlier this year. In March, BVIEC absorbed $2.64 million in fuel costs while the government contributed another $1 million, providing customers with more than $3.6 million in combined relief. Despite the subsidies, residents reported sharp increases in their electricity bills after the average fuel price rose by 55 per cent in one month.
Penn also questioned whether existing consumer-protection arrangements could ensure that savings from private renewable-energy investments reached shoppers.
“We’re going to see an increase in the food prices over the next several months if we don’t do this properly,” Penn stated.
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1500 kilowatts/hours is a small house. Get real! you are raising rates on everyone.
While I understand the need to improve the financial position of the Electricity Corporation, I believe there is a better long-term solution than simply increasing costs for large electricity consumers. Rather than relying solely on higher tariffs, the government should encourage supermarkets, food importers, and other large businesses to invest in solar power.
This could be done by offering grants to help cover installation costs, removing import duties on solar equipment and batteries, providing tax incentives, or making low-interest loans available. In return, businesses would commit to installing solar systems within a set timeframe. Many of these businesses have large roof spaces and high electricity usage, making solar a practical and cost-saving option.
By generating some of their own electricity, businesses can reduce their reliance on expensive imported fuel and lower their operating costs. That means less pressure to pass those costs on to consumers through higher food prices. A balanced approach could also reward businesses that invest in solar with reduced tariffs or rebates, while gradually increasing costs for those that choose not to make the transition.
If we are serious about helping families cope with the rising cost of living, then we must look beyond short-term fixes. I urge the government to use this opportunity to introduce a Solar Incentive Programme that helps businesses lower their electricity costs, reduces dependence on imported fuel, strengthens the long-term sustainability of the Electricity Corporation, and in turn keeps food prices affordable for the people of the Virgin Islands.
1500kwh is nothing , thats a house with AC and elecric stove or tumble dryer. My house takes about 70kwhs a day on avaerage a low day is 55kwh , I have a smart meter so know exacty what I use and this increase will increase much more than just food, all hotels , restaurants will have to increase their prices and all Villa rentals will increase as every single one of them use mre than 50kwh a day
Economic 101 at the end of of the day the consumer always pays. Hence , we are the ones that will feel the pain