Shoppers can pay about 1.5 p.c extra for a unit of electrical energy utilized in August, new computations present, on increased gasoline and foreign exchange prices.
The Vitality and Petroleum Regulatory Authority (Epra) has reviewed electrical energy costs upwards within the newest month-to-month evaluation, which is able to see home unusual clients pay a mean of 42 cents extra for a unit of energy used than what they paid in July.
For instance, this class of shoppers can pay Sh2,877 for 100 items this month, in comparison with Sh2,832 in July.
August now joins January and June as the one three months throughout which the vitality regulator has elevated energy costs this 12 months.
The price of electrical energy is among the most important drivers of the price of residing and doing enterprise within the nation.
Epra critiques three out of the eight parts that kind a part of energy payments month-to-month.
These are the gasoline vitality price (FEC), the international change price fluctuation adjustment (Ferfa), and the water useful resource administration authority (Warma) levy.
Within the newest evaluation, the vitality regulator has raised FEC to Sh3.48 per unit up from Sh3.25 final month, and Ferfa from Sh0.98 per unit to Sh1.17.
The Warma levy has been retained at two cents per unit.
The bottom tariff, which is known as the consumption cost, stays the biggest single part of energy payments and is adjusted each three years.
In the meantime, the inflation adjustment is reviewed by Epra each six months to allow Kenya Energy to recoup the prices it incurs from inflation.
Different parts that kind a part of electrical energy prices are Worth Added Tax (VAT), the Rural Electrification Programme (REP), and Epra levy.
The rise within the FEC indicators that the technology of thermal electrical energy elevated in July in comparison with June. The cost is used to reimburse energy producers who use heavy gasoline oil (HFO) to generate electrical energy.
The rise in Ferfa got here after the Kenyan shilling misplaced floor in opposition to the US greenback final month.
The native foreign money was buying and selling at about Sh128 in opposition to the buck initially of final month earlier than plunging to lows of Sh133 on the shut of the month.
A weaker native foreign money raises the price of buying energy from Unbiased Energy Producers (IPPs). It additionally locations an additional burden on Kenya Energy when paying its exterior money owed.
“Foreign exchange is often a product of the variation in value in addition to the quantum of funds made,” mentioned Kenya Energy Finance Supervisor Stephen Vikiru.
“We paid extra on energy buy obligations in July than in June,” he added.
The rise in energy costs is about to pinch shoppers, who’ve been experiencing easing inflation in current months.
Annual inflation eased to 4.3 p.c in July, in response to the Kenya Nationwide Bureau of Statistics (KNBS), whereas client costs fell by 0.2 p.c in the course of the month.
This was pushed by decrease costs of meals and non-alcoholic drinks, transport, and the housing, water, electrical energy, and cooking fuel index.
“The housing, water, electrical energy, fuel, and different fuels’ index declined by 0.4 p.c between June 2024 and July 2024 attributable to decreases in costs of 200kWh of electrical energy, 50kWh of electrical energy, and kerosene by 9.4 p.c, 4.4percent, and 0.8 p.c, respectively,” mentioned KNBS.
