The shilling has gained 0.6 per cent over the past one month to trade at Sh103.24 against the US dollar, according to the Central Bank of Kenya.
Consumer power bills also come loaded with a fuel levy, which like the forex surcharge, is adjusted every month.
The forex levy drop has helped cancel out effects of a rise in the fuel levy that hit a 34-month high of Sh3.35 per unit in September from Sh2.85 a month earlier where it had remained unchanged since February.
Electricity prices will this month drop by a fifth due to a steep decrease in the forex charge in power bills, offering reprieve to consumers who grappled with a six-year surge in electricity prices last month.
The forex levy, which compensates Kenya Power and electricity producers for foreign currency costs, dropped to a low of Sh0.64 per kilowatt hour (kWh) of electricity consumed in September, from a six-year high of Sh2.35 per unit last month. The Energy Regulatory Commission (ERC) adjusts the levy every month to reflect the prevailing forex rate.
The shilling has gained 0.6 per cent over the past one month to trade at Sh103.24 against the US dollar, according to the Central Bank of Kenya. Consumer power bills also come loaded with a fuel levy, which like the forex surcharge, is adjusted every month.
The forex levy drop has helped cancel out effects of a rise in the fuel levy that hit a 34-month high of Sh3.35 per unit in September from Sh2.85 a month earlier where it had remained unchanged since February. The spike in the fuel levy, which is linked to the amount of power produced by diesel generators and injected into the national grid, indicates more use of thermal power to compensate for a drop in hydro power production due to drought.
The drop in the forex levy by Sh1.71 per unit and an increase by Sh0.50 in fuel cost charge results in a net drop of Sh1.21 per unit, or 23 per cent decrease in power bills. This steep drop means homes and business will save Sh1 billion this month from lower bills, based on Kenya’ average monthly consumption of about 830 million units.
Electricity prices have a direct bearing on inflation, being one of the items in the basket of goods and services whose pricing is tracked to measure the cost of living.
