The latest increase has been motivated by escalating fuel energy costs and foreign exchange fluctuations. This is the second month in a row that electricity prices are increasing.
Kenyan households and businesses will pay more for electricity following recent adjustments by the Energy and Petroleum Regulatory Authority (EPRA) which will push up the cost of electricity in August by 1.5 percent.
The latest increase has been motivated by escalating fuel energy costs and foreign exchange fluctuations. This is the second month in a row that electricity prices are increasing.
The premium regulator for energy in the country announced revised tariffs showing that consumers will now pay Ksh38 cents per kilowatt-hour (kWh), up from Ksh325 cents per kWh in July.
“Notice is given that all prices for electrical energy specified in Part II of the (Scheduled of Tariffs, 2023) will be liable to a fuel energy cost charge of plus 348 Kenyan cents per kWh for all meter readings to be taken in August 2024,” said EPRA in a notice on Friday, August 9.
Daniel Kiptoo Bargoria, the EPRA Director General, in his speech on July 15, 2021. /EPRA KENYA
This review has been attributed to the significant increase in terms of the Fuel Energy Cost (FEC) charge, which jumped to Ksh3.48 per unit from Ksh3.25 per unit last month. Additionally, the Foreign Exchange Rate Fluctuation Adjustment (Ferfa) has increased from Ksh0.98 per unit to Ksh1.17 per unit.
The Water Resource Management Authority (Warma) levy, however, remains unchanged at two cents per unit.
What this would mean for an average Kenyan household is that one would have to pay more to get the same amount of electricity. For instance, a consumer buying 100 units will now pay Ksh2,877, up from Ksh2,832 they would pay in July
Last month, a domestic consumer using 60 units of electricity paid Ksh1,807.92, meaning the new tariffs would push up the cost of electricity and create an additional strain on Kenyans’ budgets amidst the high cost of living.
EPRA Director General Daniel Kiptoo, in the gazette notice, explained that the adjustments are necessary to reflect the changing costs of fuel and forex, which significantly impact the overall cost of electricity production.
This increase is a stark contrast to events in April whereby Kenya Power announced a 13.7 percent drop in electricity prices. On April 15, the monopoly power firm revealed that the strengthening of the Kenyan shilling and reduction in the cost of fuel necessitated the drop in power prices.
“The fuel cost charge and foreign exchange fluctuation adjustment, which comprise the key variable components of the electricity bill, reduced by 37.3% between March 2024 and April 2024, across all customer categories, as gazetted by the Energy and Petroleum Regulatory Authority (EPRA),” stated Kenya Power in part at the time.
This saw domestic customers consuming less than 30 units per month paying Ksh629, down from Ksh729 in March 2024. Those who consumed 60 units enjoyed an 11.2 per cent reduction, with bills dropping to Ksh1,574 from Ksh1,773.
However, the gains have been eroded by the subsequent increases, leaving many Kenyans questioning the sustainability of the current energy pricing model. Any rise in the cost of electricity has broader implications for the Kenyan economy, particularly for the manufacturing sector.
To mitigate this, President William Ruto on April 23 announced that the government would introduce special electricity tariffs favouring the country’s manufacturing industry, revealing that manufacturers operating at night will be getting their power at 50 per cent of the normal rate.
The new directive, according to Ruto, would allow manufacturers to work during the off-peak hours and take advantage of power production that occurs when Kenyans are generally asleep.
