Electricity fuel cost levy jumps to 13-month high

The fuel cost levy has hit a 13-month high, setting the stage for an increase in power bills for households and businesses grappling with the Covid-19 economic fallout.

The Energy and Petroleum Regulatory Authority (Epra) in its latest data released on Friday shows that the Fuel Cost Charge (FCC) for January is Sh2.58 per kilowatt hour.

This is the highest since December 2019 when it was Sh2.65 per kilowatt hour.

This is a Sh0.02 rise from last December, meaning that businesses and households will now pay more for their monthly consumption of electricity amid the depressed earnings and limited sources of income due to the pandemic.

The rise came a day after the energy regulator increased diesel prices by Sh4.57 per litre, directly affecting the cost of producing power in the subsequent months.

“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 258 Kenya cents per kWh for all meter readings to be taken in January, 2021,” EPRA said on Friday.

The price of diesel rose by the largest margin since July last year on the rising costs in the international crude market.

Crude oil prices have been on the rise since last month, averaging $49.99 per barrel riding on the hopes that more countries would take the Covid-19 vaccine, return to normalcy and accelerate global demand for oil.

Kenya’s economy relies largely on diesel for power generation and transport and global increments in the cost of the product directly hits households and businesses.

The rise will increase the pain of power bills on households and businesses that are already grappling with reduced incomes, job losses and depressed sales in the wake of the Covid-19 pandemic.

The rise bucks a trend where FCC had stagnated at Sh2.56 per kilowatt an hour for three months to December last year at a time households and businesses were already hit by the adverse economic effects of the Coronavirus.