Consumers hit by twin electricity and fuel price shocks

The energy regulator has made a U-turn and increased electricity prices by 15.7 percent, reversing the January cuts by the former President Uhuru Kenyatta administration, in what has handed consumers a twin blow in the wake of higher fuel prices.

The Energy and Petroleum Regulatory Authority (Epra) also quietly hiked pass-through costs last week, including fuel, forex and inflation adjustments, pushing the cost of a kilowatt hour unit to Sh25.3 for domestic consumers who use more than 100 units a month.

This means that with Sh1,000, consumers on the over 100kWh tariff would now get 39.5 units of power, down from the 45.7 before the review.

The heavier consumers and industries will see their power costs rise even higher since the pass-through costs now account for more than a third of power bills.

The regulator has also almost doubled the forex charge from Sh0.7 to Sh1.3 — a high last seen in January 2021, reflecting the impact of the shilling decline on power bills — and adjusted the pricing to higher inflation of Sh0.67.

A rise in the fuel and currency surcharge increases the cost of power by reducing the number of units consumers get for a similar amount of money.

The record-high fuel surcharge comes at a time when the government and the International Monetary Fund (IMF) have agreed to end the fuel subsidies that have been cushioning consumers.

President William Ruto indicated on Tuesday he will imminently drop the fuel subsidy, setting up Kenyans for higher transportation and production costs.

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