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Government is implementing a slew of measures to shield citizens from rapidly escalating oil prices, driven by severe disruptions to shipping in the Strait of Hormuz during the ongoing tensions involving the United States and Israel with Iran.
Minister of Finance, Ryan Straughn, says this will be done on three fronts: securing the island’s fuel supply and protecting electricity bills, capping prices at the pump, and addressing the implications of spiralling freight costs.
He says, on government’s instruction last week, the national fuel importer, the Barbados National Energy Company, has locked in the price of heavy fuel oil, which powers electricity generation, at US$92 per barrel for the next three months.
Government will also subsidise electricity prices in addition to locking in the price of heavy fuel oil.
From April 1, 2026, Government will absorb 50 per cent of any increase in the fuel clause adjustment on electricity bills above the March 2026 bill for the next three months.
The cost of this subsidy will be 7.9 million dollars over the three-month hedge window.
With effect from April 1, 2026, until March 31, 2027, Government will also extend the cap for VAT collected on gas to 47 cents per litre and 37 cents per litre on diesel.
