It was revealed during a Senate hearing last week that the Palau Public Utilities Corporation (PPUC) is seeking to raise their tariffs to match world fuel prices and current inflation rates.

Prior to the meeting, a prohibition was put in place by the Olbiil Era Kelulau (OEK) to ensure that PPUC maintains the tariff price at 17.7 cents.

Rhea Rengulbai, Public Information Officer of the PPUC mentioned that the prohibition was put in place due to the senate’s belief that the agency is overpricing its customers and not providing up to par services.

According to data collected by the Palau Public Utilities Corporation, on July 2020 they will have to lower their tariff rates to 0.98 cents making it the lowest fuel rate in PPUC history.

This marks a huge loss for PPUC. Furthermore, it is still trying to recover from the economic impacts of the prohibition.

Ms. Rengulbai said that “PPUC’s recovery period is 6 months prior. So right now April to June 2020, we are recovering fuel from October to December 2019.” She added that PPUC spends close to $14 million a year on fuel.

The OEK has offered assistance to PPUC by providing them with $500,000 every quarter to help subsidize the fuel portion of the tariff along with a supplemental budget of $1 million. The OEK has instructed PPUC to write an official letter regarding the prohibition of the tariff increase.

The CEO of PPUC is working on an official response letter to the OEK.