by RICKY JORDAN

BARBADIANS HAVE AWAKENED this morning to reductions in the prices of refined petroleum products that drive every energy-based commodity and industry in this country.

Effective midnight last night, Government reduced the price of diesel from $2.57 per litre to $2.48, and that of gasolene from $2.67 to $2.55, bringing particularly good news to the public after an enviable ease given to farmers, fisherfolk, public service vehicle (PSV) operators, and the manufacturing sector four months ago.

New pricing

Prime Minister David Thompson said yesterday the new adjustment – following steep price hikes on diesel and gas in April – was the result of a new pricing mechanism Government had decided to put in place now that the time was right.

Calling the current circumstances "propitious" in light of falling global oil prices to below US$90 per barrel, Thompson told the media at a post-Cabinet briefing at Government Headquarters that this would either have led to a reduction or stabilisation of the local price.

"We think this is about the time, and we now can move forward from here based on the pricing structure that we have announced . . . . There is a new formula that will be put in place between the Barbados National Terminal Company and the suppliers of petroleum products from here on," he said, adding that the pricing mechanism would be updated fortnightly.

"There is built into the price structure a small amount which will go towards reducing the Barbados National Oil Company Ltd (BNOCL) debt," he informed.

Adding that the subsidy on energy products had so far cost Government $180 million, the Prime Minister noted that accumulated losses from BNOCL for unleaded gasolene and diesel were $138.5 million for January 2007 to August 31, 2008, while the subsidy for electricity between December 2007 and last month cost $40.3 million; about $179 million in all.

With this in mind, he described it as "ludicrous" for some to argue that Government should borrow money topay for the consumption of petroleum productsby citizens.

"Who pays back the debt in the end?" he asked. "It is the taxpayers, every single one of us, who have to make some contribution to paying it back, and then perhaps even continue to bear the prices we're bearing. That would be a ludicrous financial policy, reckless in the extreme and certainlynot part of theBarbadian experience."

Thompson also reiterated his wish for Government resources to be spent on alternative energy as well as on energy conservation, since Barbados simply could not afford the luxury of using the country's resources to finance the present levels of energy consumption.

Asked how long it should take to clear the BNOCL debt, he said his administration was not trying to "recover all in one or two months" , but the pricing structure had been designed to make the least significant impact on the consumer.