Corporate Communications Manager for LUCELEC, Roger Joseph recently indicated that customers can expect a slight reduction in energy bills for January 2015. The 4.7 cent reduction per unit reflects the slightly lower average price the company paid for fuel in December 2014.

The reduction, he said, is not as a result of the Government’s decision to lower fuel prices at the pumps. Rather, the company’s fuel price hedging program adopted since 2009, allows LUCELEC to hedge seventy-five percent of the fuel it purchases.

“LUCELEC does not buy fuel at the pumps and so the price of fuel at the pumps does not impact LUCELEC’s cost of fuel. The company buys its fuel directly from Buckeye and is purchased at the spot prices of oil,” Mr. Joseph explained.

“For 75 percent of the fuel purchased, we agree with the head supplier the price that we will pay for fuel for several months into the future—irrespective of what happens with the price of oil, whether it goes up or down. What is happening on the world oil market only affects a small part of the price that we pay for fuel, because seventy-five percent of the oil that we use, we already have an agreed price for,” he continued.

“So customers will see a reduction in the fuel surcharge because the 25 percent we are buying is lower, but it is not going to be as dramatic as the fall of world oil prices.”

There has been a dramatic decrease in the price of oil on the world market since September last year. The reduction in the fuel surcharge will be applied to the January 2015 bill.