Parliamentarians have approved amendments intended to reduce energy costs by slashing the duty rate for diesel and fuel oils used by Belco.

David Burt, the Premier and Minister of Finance, said that the Customs Tariff Amendment Act 2024 would offer relief to the public after increases by the energy provider.

He told the House of Assembly: “On July 8, the Regulatory Authority of Bermuda ordered increases to all Belco facilities charges and energy charges.

“The RA has estimated that as a result of the uprated charges, average overall residential rates would have been raised by 8.5 per cent and commercial rates would have increased by 9.4 per cent.

“This Government recognised that this announcement caused concern and added stress for families.”

Mr Burt said that the amendments would cut the duty on the fuel used to generate electricity by 60 per cent, from 20 cents a litre to eight cents.

The move would result in a $10 million decline in revenue raised by the tax.

“This Government is not pushing relief down the line,” the Premier said. “We are acting now to support the people in need and deserve relief immediately.”

Scott Pearman, the Shadow Minister of Home Affairs, branded the legislation as a tax cut for Belco — something which Mr Burt repeatedly disputed, when he said that Belco’s customers paid the duty rate — but he hoped the relief would soften the blow of rate increases by the energy provider.

The One Bermuda Alliance MP said: “Yes, the impact of Belco’s base rate increase will be softened by this tax reduction for Belco, and for that reason the Opposition will support this Bill.

“For how long, and how much is this tax cut to Belco going to cost? How much exactly is the tax reduction to Belco in real terms?”

Mr Pearman said the reduction was a temporary solution to the problem, which reduced the resources available for other initiatives.

He told the House: “We have a regulator in the energy sector but we have one with insufficient powers.”

Mr Pearman called for the Regulatory Authority to be given greater teeth to help address the underlying issues behind rising electricity costs.

Mr Burt responded that changes to payroll tax had brought record revenues, which has allowed the Government to increase funding for social programmes and reduce taxes on energy paid by Belco’s customers and still deliver a balanced Budget.

“The fact is we are cutting taxes on everyday Bermudians and every single person who consumes energy will receive the benefit of this cut,” he said.

“It is not temporary, it is permanent, and in February when this Government delivers another Budget, we will cut those taxes further, because that is what we are committed to — cutting taxes for working people.”