The report, with recommendations, is expected to be presented to the cabinet on Tuesday or Wednesday this week, government officials said.
“If the fuel prices keep going up, it will put the majority of Marshallese back 40 years,” Marshalls Energy Company general manager William F. Roberts said over the weekend of electric rates that have been raised four times in the past six months. “People won’t be able to put on even one light.”
Another officials said the aim of getting government to declare a state of emergency is to get action “before a disaster hits.”
Although details of the state of emergency proposal were not available, a report submitted by the board of directors of the two government utility companies to the government at the end of last week states that they are facing an $18 million shortfall this year — an amount equal to 15 percent of the country’s national budget.
It also says that the Majuro and Ebeye island utilities are facing a July 10 deadline for payment of $6.5 million for the fuel delivered earlier this month from SK Networks of S. Korea, the utility companies’ fuel supplier.
In the face of repeated rate hikes by the utilities, power consumption has dropped off, and the utilities are presenting operating at a monthly deficit estimated at $1.5 million.
“Power rationing will immediately come into effect to conserve fuel stocks for power generation,” if there is no cash injection from government to meet the July 10 fuel purchase deadline, the board of directors report said. The utilities said they will be able to supply power to Majuro with present fuel stocks and on a rationed basis only until early August.
If the cabinet endorses the state of emergency, which is expected, government officials indicated this will open the door for emergency funding and policy actions such as tax holidays for the utilities to deal with the impending crisis.
