Economy

No consumer respite as power bills hit 38-month high on fuel

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Kenya Power workers. FILE PHOTO | NMG

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Summary

  • Epra, in a notice, said that fuel cost charge (FCC) has increased to Sh3.88 from Sh3.77 last month— the highest since July 2018.
  • Increase in the fuel surcharge will see consumers get fewer units compared to last month for the same amount.

Power bills have hit a 38-month high following an increase in the fuel surcharge levied on electricity tariffs, adding pain to consumers already smarting from high cost of petrol, diesel, kerosene, and cooking gas.

The Energy and Petroleum Regulatory Authority (Epra), in a notice, said that fuel cost charge (FCC) has increased to Sh3.88 from Sh3.77 last month— the highest since July 2018.

Increase in the fuel surcharge will see consumers get fewer units compared to last month for the same amount.

For example, Sh1,000 will fetch 39.82 units down from 40.13 units last month.

The rise in electricity bills is a blow to consumers who are also grappling with historic high prices for petrol, diesel and kerosene as well as cooking gas.

“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 388 Kenya cents per kWh for all meter readings to be taken in September, 2021,” the energy regulator said in a notice.

Epra did not disclose what drove the increase, but it comes at the back of costly crude due to demand growth and a rise in the foreign exchange fluctuation from Sh0.68 per kilowatt hour (kWh) to Sh0.76.

Fuel prices last week rose to the highest level in Kenya’s history after the State discontinued a subsidy scheme introduced in April to ease public outrage over the high cost of living.

The price of petrol increased by Sh7.58 a litre in Nairobi to Sh134.72, diesel jumped Sh7.94 to Sh115.6 a litre while kerosene rose by Sh13 to Sh110.82 per litre.

Diesel and kerosene prices had remained unchanged since April at Sh107.66 and Sh97.85 a litre. Petrol had remained unchanged at Sh127.14 since June.

FUEL COST

The increase in cost of electricity will unleash pricing pressure across the economy as producers of services and goods factor in the higher cost of power.

FCC had fallen consecutively in April and May — the first time this year it dipped twice in a row, offering a reprieve to households and businesses.

The levy is influenced by the share of electricity from diesel generators and had been on a gradual rise since May last year at the back of the global recovery of prices in crude oil, increasing the cost of the fuel used for generating electricity.