With the rising cost of fuel attributed to the conflict in Ukraine and supply chain challenges globally, TAU has had to review its position to ensure that it is able to continue to provide reliable and sustainable power.
Fuel is a significant cost for TAU, and the fuel cost increases are having a significant impact on its financial position and future financial sustainability. Within the last six months, the purchase price of diesel by TAU has more than doubled and we have absorbed these increases to this point. Historically, fuel has accounted for about 33% of sales (in the 3 years prior to Covid-19). In the current time, this has climbed to 65% of sales due to fuel prices. Unfortunately, we now find it necessary to pass some of this cost on to ensure we can continue to deliver power sustainably into the future. This surcharge is to cover a portion of existing fuel costs, and not to recover any costs associated with previous financial years.
It is important to note that with this fuel surcharge, TAU will continue to shoulder part of this burden for our customers, in that we will absorb half of the increase in fuel costs that TAU is incurring for the delivery of power.
We advise that a temporary fuel surcharge will commence from Monday, 3rd October 2022 meter reading/invoicing, with a planned end date of 30th June 2023 (to be reviewed). The surcharge will not show as a separate item on the power bill. It will be incorporated as an increase of $0.15 per unit across all tariff categories per the table below.
The Fuel Surcharge applies as follows to the Tariff Categories of TAU:
Current Usage Tariff
Temporary Fuel Surcharge
Temporary Tariff as of 03 October 2022
$0.53 – first 60 units
$0.77 – 61-300 units
$0.79 – over 300 units
As mentioned, the fuel surcharge is expected to be temporary and fuel prices will be reviewed regularly to determine when it can be removed.
We recognise that the fuel surcharge will be challenging for some of our customers, so we encourage those experiencing financial hardship, to come in and see our team to discuss payment plan options.
As alluded to by our Shareholder, Cook Islands Investment Corporation (CIIC), in its recent media release, TAU has been working hard in the last year in collaboration with the ADB and stakeholders, on the next step of our renewable energy development, which we expect to release in the coming weeks.
We take this opportunity to thank our customers for your support and understanding as we move together through these challenging times, as we have done through the Covid-19 pandemic.