Kenya’s electricity consumption drops on higher prices

Electricity consumption in Kenya fell last month as users began feeling the pinch of higher energy prices on discontinued subsidies and a weakening shilling.

Data from the Energy and Petroleum Regulatory Authority (Epra) shows power use declined to 1.099 billion kilowatt-hours (kWh) in September from 1.11 billion units that were consumed in August after power prices were increased for the first time in 10 months.

Electricity use is one of the major barometers of how the economy is performing, with lower uptake signalling reduced economic activities such as manufacturing.

“Total units generated and purchased (G) including hydros, excluding exports in September 2022 (was) 1,099,340,544kWh,” said Epra Director-General Daniel Kiptoo in a gazette notice on Friday.

Fuel cost component

The drop in power consumption comes after EPRA increased the fuel cost component of the power bill by 46.6 percent leading to a sharp jump in prices.

The energy regulator raised the fuel cost charge (FCC) to Ksh6.79 ($0.056) per kilowatt-hour (kWh) of electricity up from Ksh4.63 ($0.038).

Epra also nearly doubled the Foreign Exchange Fluctuation Adjustment (Ferfa) to Ksh1.36 ($0.011) up from 73 cents ($0.006) to cater for the weakening of the Kenyan shilling against the greenback.

This was the first time Epra has adjusted the rates since December.

The new prices came after the government ended its subsidy on electricity.

Further, consumers are also paying more for electricity this month after Epra raised the FCC for the second month in a row thus higher bills.

Epra has increased the FCC to Ksh7.09 ($0.058) per kilowatt-hour (kWh) up from Sh6.79 last month.

The latest rise in the fuel component of electricity brings that cost element close to its record high in a month of Ksh9.03 ($0.075) per kWh that was set in June 2012.

Epra has also raised Ferfa by 8.8 per cent to Ksh1.48 ($0.012) per unit up from Ksh1.36 ($0.011) per unit last month after the Kenyan shilling continued to weaken further against the US dollar.

“Pursuant to Clause 1 of Part III of the Schedule of Tariffs 2018, 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 709 Kenya cents per kWh for all meter readings to be taken in October 2022,” said Mr Kiptoo in the notice.

Drop in cost of fuel

Higher power prices come despite a significant drop in the cost of fuel as the government moves to recover the money that had been used on the electricity subsidy since December.

The landed cost of petrol dropped by 10.6 per cent per cubic metre between August and September.

Meanwhile, the landed cost of diesel fell by 6.87 per cent while that of kerosene dropped by 1.82 per cent.

The higher power prices will further push up inflation, which hit a 63-month high of 9.2 per cent in September.

Source


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