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Reprieve as electricity prices drops slightly

Prepaid electricity meters at a building in Mombasa

Prepaid electricity meters at a building in Mombasa where electricity for several houses was disconnected by the Kenya Power Company following a faulty Prepaid Token Box in this photo taken on January 1, 2020. 

Photo credit: Kevin Odit | Nation Media Group

What you need to know:

  • Electricity consumers have been handed a little reprieve after the energy sector regulator cut power prices for February by 3.8 per cent, citing lower global crude prices that eased the cost of producing thermal power.
  • Data from Kenya Power shows Epra has cut the fuel cost charge from Sh7.18 per unit in January to Sh6.59 per unit this month.
  • The latest monthly adjustment of power prices has also seen Epra cut the foreign exchange rate fluctuation adjustment to Sh1.85 from Sh1.93.

Electricity consumers have been handed a little reprieve after the energy sector regulator cut power prices for February by 3.8 per cent, citing lower global crude prices that eased the cost of producing thermal power.

Data from Kenya Power shows the Energy and Petroleum Regulatory Authority (Epra) has cut the fuel cost charge from Sh7.18 per unit in January to Sh6.59 per unit this month.

The latest monthly adjustment of power prices has also seen Epra cut the foreign exchange rate fluctuation adjustment to Sh1.85 from Sh1.93.

Consumers were however denied a steeper drop in power prices due to the higher inflation adjustment that Epra made last month. The regulator raised the inflation adjustment cost to 85 cents per unit from 67 cents per unit and this will be in place for six months.

The slight drop in power costs means that lifeline customers enjoying the cheapest electricity tariff, who bought 48.86 kWh of power for Sh1,000 last month will pay Sh963 to buy the same amount of electricity, a reduction of Sh37.

While only a marginal reduction, it will be a reprieve for consumers who have been experiencing frequent monthly raises of power prices on high global fuel prices and a weak shilling.

Global crude oil prices have however eased in recent months, enabling thermal power producers to procure fuel at a cheaper cost, which has translated to a cut in power costs this month.

For instance, the landed cost of petrol fell by 6.19 per cent per cubic metre in December, that of diesel reduced by 11.08 per cent and kerosene by 4.07 per cent for the same quantity.

Thermal power remains by far the most expensive source of grid electricity in Kenya. While consumers used just 1,577 GWh of thermal power (12 per cent) of total power produced in the financial year to June 2022, this amounted to more than a third (33.2 per cent) of the total non-fuel costs incurred by Kenya Power. 

The cheaper power might however not last long should Epra approve the new tariffs proposed by Kenya Power.