Electricity consumers will pay an extra Sh500 million this month after the energy regulator raised the monthly fuel surcharge levied in tariffs to the highest level in two years.
The Energy and Petroleum Regulatory Authority (Epra) on Friday increased the fuel surcharge from Sh2.92 per kilowatt hour (kWh) last month to the current Sh3.63 — the highest level since May 2019.
Increased reliance on fuel-powered generators to produce electricity due to low water levels in the hydroelectric dams and costly petroleum sparked the rise in the surcharge, piling pressure on homes struggling with a rise in the cost of essential items.
The monthly electricity sales average 742.34 million kilowatt-hours based on the latest data, meaning that homes and businesses will pay at least Sh527 million to Kenya Power to compensate thermal electricity generators.
“All prices for electrical energy specified in Part II of the said schedule will be liable to a fuel energy cost charge of plus 363 Kenya cents per kWh for all meter readings to be taken in June 2021,” Epra said in a notice.
The rise in electricity prices is a blow to households and businesses that are grappling with expensive fuel due to rising crude costs in the global market.
Motorists in Nairobi are paying Sh127.14 per litre of petrol from Sh107.09 in March, representing a Sh20.05 increase.
This has raised petrol prices to historic highs.
The rising electricity and fuel prices have piled upward pressure on inflation.
The costs of energy and transport have a significant weighting in the basket of goods and services that is used to measure inflation in Kenya.
Producers of services and goods are also expected to factor in the higher cost of petroleum products, unleashing pricing pressure across the economy with ramifications on the cost of living measure.
President Uhuru Kenyatta in March set up a team to review power purchase agreements signed over the years by Kenya Power #ticker:KPLC, which has been making losses in the recent past.