Jamaicans are being told to brace for an increase on their electricity bills come January as global oil prices continue to surge. Fuel charges account for more than 50 per cent of electricity bills and those charges have gone up 32 per cent in the last ten months.

Earlier this month the Jamaica Public Service (JPS) cautioned customers that increasing fuel costs will reflect in higher electricity bills in coming weeks. The company said it has been experiencing higher fuel prices in the past few months, as a result of the international upsurge in prices. Global uncertainties have led to increases in the price of both oil and natural gas. JPS further noted that the increase in fuel costs has been compounded by the devaluation of the Jamaican dollar.

But it’s not only affecting Jamaicans, businesses and households around the world are also grappling with the massive surge in fuel prices. In the United Kingdom (UK), for example, some companies have been forced to pause, reduce or cease production altogether which is having a knock-on effect on employment. Others have simply passed on their increased expenses to consumers.

In the UK, industry players have warned that energy bills will increase by another 50 per cent next year unless the Government intervenes. British gas and electricity supplier EDF has said the situation is critical.

JPS is projecting that this situation could continue through the winter months.

West Texas Intermediate (WTI) (which is Jamaica’s reference for oil on the global market) sold for as high as US$80 per barrel earlier this week, that’s almost the highest it has sold for in a single month. The last time oil traded this high was in October this year when supply issues forced global prices to soar to a seven year high.

The supply issues have resurfaced, driven by a few climate-related variables which caused havoc earlier in the year. The colder than normal winter season this year resulted in many countries tapping into their oil reserve which has still not been replenished due to other weather events throughout the year. Gas power plants were also forced to work overtime due to an unusual windless summer which reduced the production of wind electricity in Europe. At the same time, demand from China skyrocketed cutting into the global oil market supply.

Meanwhile, the Organization of the Petroleum Exporting Countries (OPEC+) have drawn a hard line against boosting output to the global market.

At its last meeting, OPEC+ decided to stick with its output plans until January despite the spread of the Omicron variant.

Russian Deputy Prime Minister Alexander Novak said OPEC “wants to provide the market with clear guidance and not deviate from policy on gradual increases to productions.”

OPEC+ is scheduled to meet on January 4, 2022 when a decision will be made on whether to proceed with a planned production increase of 400,000 barrels per day in February.

In the meantime, JPS is encouraging customers to continue to practice energy management. JPS said customers who have smart meters can monitor their usage on the JPS Mobile App on a weekly, daily and even hourly basis.