Kenyans will pay more for electricity this month after the energy regulator increased prices owing to higher fuel costs and a weaker shilling.
The Energy and Petroleum Regulatory Authority (Epra) has raised the Fuel Energy Charge (FEC) to Sh4.94 per unit, an increase of 18.7 percent from Sh4.16 last per unit month. Epra also raised the foreign exchange rate fluctuation adjustment (Ferfa) from Sh1.38 per unit to Sh2.05, an increase of 48.5 percent.
This has pushed up the cost of a unit of electricity to about Sh28 for an ordinary domestic customer, an increase of about 3.7 percent from about Sh27 per unit in September.
The FEC is a pass-through cost collected by Kenya Power and remitted to power producers who burn diesel to generate electricity. The cost lags for a month, which means the FEC for October covers the fuel consumed in September.
Epra last month increased the prices of petrol by Sh16.96 per litre, diesel went up by Sh21.32 while kerosene increased by Sh33.13. This means that in Nairobi, motorists are now buying petrol at a record Sh211.64, diesel at Sh200.99 and kerosene at Sh202.61.
This is the first time fuel prices are retailing at above the Sh200 mark in Nairobi. The Ferfa charge covers the fluctuation of the Kenya shilling against major currencies such as the US dollar.
It covers costs incurred by Kenya Power such as repayment of foreign loans and power purchase costs.
The Kenyan shilling, which was trading at a mean of Sh148.7 against the US dollar on Monday, has been on a free fall in recent months despite interventions by the government to arrest its decline, especially through fuel importation on credit.
The increase in power prices is set to exert further pressure on households and businesses even as inflation last month rose for the first time since May. Inflation rose to 6.8 percent in September, according to the Kenya National Bureau of Statistics (KNBS).
Prices of commodities under transport, food and non-alcoholic beverages and housing, water, electricity, gas and other fuels, increased by 13 percent, 7.9 percent, and 6.3 percent, respectively, between September 2022 and September 2023.
