The Electricity Regulatory Authority (ERA) has announced reduction of power tariffs, which it says should shore up the economy by boosting the local manufacturing sector.
Patrick Tutembe, the ERA senior economist, announced the 1.44% downward revision of the tariff on Friday. But he said details of how each sector will benefit will be announced today by the ERA chief executive, Eng.
Ziria Tibalwa Waako. He said, however, the bulk of the benefits will go to commercial and medium scale industry customers.“In line with the policy pursued by the authority and in order to promote value addition and small-to-medium industrial growth, we have seen it fit to adjust the tariff downwards,” Tutembe said.
He said the reduction is mainly supported by exchange rate appreciation and the energy mix growth towards capacity plants. “We have registered growth in demand for electricity of 7.4% between Quarter 4 of 2021 recorded at 1,260.25GWh and Quarter 1 of 2022 recorded at 1,353.1GWh.
This is attributed to the re-opening of the economy and the electricity demand growth initiatives,” Tutembe said.“In the period under review, there has been a significant appreciation of the Uganda shilling against the US dollar by 0.71% from sh3,564.09 per US dollar for Quarter 1 of 2022 to sh3,538.96 per US dollar for Quarter 2 of 2022,” he noted.>> ERA officials said the bulk of the benefits of the power tariffs reduction will go to commercial and medium scale industry customers.“This positive trend was supported by the international fuel price for crude oil for February 2022, which was reported at $94.22 per barrel compared to $80.37 per barrel.
This was one of the factors used in the determination of the base tariffs for 2022,” he said.Michael Mwondha, ERA’s senior economist in charge of competition and monitoring, said Uganda’s consumer price index increased by 1.01% from 115.35 for the month of November 2021 to 116.52 for February 2022. This, he added, is indicative of steady economic recovery, which is supposed to be aided by all the drivers of the economy.
He said ERA is continuing with the implementation of the declining block tariff, popularly known as the “cooking tariff,” which is supposed to encourage consumers to cook using electricity rather than wood.“We launched this initiative for the domestic electricity users in January 2022, and in a month, they purchase electricity at a cost of sh412 per unit at between the 81st and 150th units.
This makes cooking cheaper than it has ever been,” he said.In the last tariff adjustment, domestic consumers were made to pay sh250 for the first 15 units under the lifeline tariff and thereafter, pay sh747.5 for the next units purchased — a reduction from sh750.9 in the previous quarters.Commercial consumers paid sh616.6 from sh639.8, while medium industrial consumers paid sh526.9 from sh556.0.Large industrial consumers paid sh355.0 from sh361.0. Extra-large consumers paid sh300.2 from sh301.7 while sh370.0 was the tariff for street lighting.