HOW TTEC HIKE WOULD SEND UP COST OF LIVING

THE cost of living would go up by an average of five per cent as a result of the impending hike in electricity charges, according to estimates from economists and business people.

That would add further pressure on consumers, who are already faced with a 27 per cent rise in food prices over the past three years, and increased costs of medicine, transportation, and housing.

Overall, the cost of living has gone up by 13 per cent since 2020, while public sector workers have received four per cent increases on long-unresolved pay deals.

Some imported food essentials are costing up to 100 per cent more than they did in 2016.

Various analyses have uncovered that passing on the increased cost of electricity by an average business place would set back consumers an additional five per cent or more on each bill.

Rough studies have been done by business organisations and financial experts, with similar findings.

That would be a double-whammy for consumers, who have to foot their own Trinidad and Tobago Electricity Commission (TTEC) rate increase in addition to paying for higher operating costs by manufacturers and retailers.

The Regulated Industries Commission (RIC) has recommended increased electricity charges of between 15 and 64 per cent, which are expected to be implemented by TTEC early in 2004.

For businesses, the higher electricity charges add to the cost of security services in light of the crime epidemic and delivery charges caused by five hikes in the prices of fuel.

Various Chambers of Commerce have not publicly stated the likely mark-ups on retail items, and some have called for an intervention from the Government.

One Chamber official said the recent increase of the minimum wage from $17.50 to $20 an hour would be wiped out by the electricity rate hike.

Economist Vaalmiki Arjoon said that “the exacerbated cost of living… means that the purchasing power from the increase in the minimum wage for those in the lower income bracket would be eroded.”

There is fear that the Small and Medium-Sized Enterprises (SME) sector, which has been faltering since the Covid-19 shutdown, would be particularly hard hit.

So, too, would micro and cottage businesses, of food preparations and other retail operations.

Arjoon fears that the higher electricity charges and other business costs could “jeopardise the performance” of the growing manufacturing sector.

The energy sector, which has been struggling in recent years, would also be adversely affected.

In a country in which a third of the workforce earns less than $6,000 a month, further hardship and income inequality are expected to result from the TTEC rate hike.

Rents for both businesses and families are also expected to be rise.

“There are no winners here,” an official of a regional Chamber said, adding: “No business absorbs higher costs.”

Some analysts argued that consumers are being made to pay for TTEC’s inefficiencies and that the corporation should review all its operating costs.

The Central Bank has said that headline inflation (cost of all commodities) have eased to 4.1 per cent in August 2023, from 4.7 per cent the previous month.

There were “slower price movements in food,” it was explained.

But that still requires consumers to dig deeper into their pockets while receiving the same earnings or being displaced from their jobs.

Now the looming electricity rate increase is a further blow, especially for those who are struggling to make ends meet.