Electricity prices up 5pc dimming festive mood
The energy regulator has increased electricity prices for the third time in four months by 5.2 percent paving the way for a costlier Christmas for consumers in a period filled with high energy use activities.
The Energy and Petroleum Regulatory Authority (Epra) has raised the fuel cost charge (FCC) from Sh6.36 per unit to Sh7.12 per unit, and the foreign exchange rate fluctuation adjustment (Ferfa) from Sh1.41 to Sh2.07 per unit.
“Pursuant to Clause 1 of Part III of the Schedule of Tariffs 2018, notice is given that all prices for electrical energy specified in Part II of the said Schedule will be liable to a fuel energy cost charge of plus 712 Kenya cents per kWh for all meter readings to be taken in December 2022,” said Epra Director-General Daniel Kiptoo in a gazette notice.
This has raised the unit cost of electricity for lifeline consumers – mostly poor households consuming on average less than 100 kilowatt-hours (kWh) of electricity monthly – to Sh20 from Sh19.
The adjustments cater to fuel energy and foreign exchange fluctuation costs incurred by Kenya Power and come just days after the company revealed plans to bill some of its customers in foreign currency.
The firm failed to disclose whether these targeted customers would be given a special tariff that excludes them from paying the monthly forex adjustment rate in their monthly bills to cushion them from incurring the same cost twice.
The increase in power prices reverses the drop in the cost of the commodity by a similar margin last month and is the third time Epra is increasing the prices in four months after similar increases in September and October.
This signals a costlier Christmas for both household and industrial customers at a time manufacturers are ramping up production of especially fast-moving consumer goods to meet the annual uptick in demand during the festivities.
This comes at a time households are already feeling the pinch of increased costs of other commodities with annual inflation hitting 9.5 percent last month.
This means this will be the most expensive Christmas in years for many individuals, as the cost of food has increased by 15.4 percent between November 2021 and November this year, transport costs have grown 11.7 percent, while housing, water, electricity, and gas prices have risen by 6.1 percent during the period.
The high living costs headache is however set to hit a new gear as banks start to increase their charges on loans after the Central Bank of Kenya (CBK) raised the base lending rate to tame rising inflation.
Many households are knee-deep in debt and rely on loans from various lenders to meet their daily needs.
NCBA has already notified its customers of the higher interest rates that will take effect on January 6 next year.
The bank has raised the base lending rate for its Kenya shilling-denominated loans to 11 percent from 10 percent and its dollar-denominated loans to 10 percent from 9 percent.
“Dear customer, this is to notify you of a change in our shilling and US dollar base lending rates from 10 percent to 11 percent per annum and 9 percent to 10 percent per annum respectively effective January 6, 2023,” said NCBA.