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Raised Power tariff hit Uganda and Tanzania

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By Hussein Mulefu & John Barigye

newsdesk@greatlakesvoice.com

electricity-supply-meter-cabinet (Net photo)

Kampala, Uganda-Domestic power consumers will pay 36 per cent increase for every unit. According to the schedule, domestic consumers will pay Shs524.5 from Shs385.6 per unit of energy consumed whereas commercial consumers shall pay Shs487.6 up from Shs358.6 per unit; medium industries Shs458.9 from Shs333.2 per unit while large industries will pay Shs312.8 from Shs184.8.

Speaking to journalists in Kampala yesterday, Mr Apire said: “The tariffs were inevitable given that government could not afford to continue dishing out Shs396 billion in subsidies to the power generators and distributors.”

The government pronouncement came contrary to earlier media reports that the new tariffs ranging from 36 to 69 per cent in hikes depending on the type of consumer were slated to start on February 1.

The increment in power tariffs come at a time when consumers are enduring 12-hour load-shedding because less power is generated, and thus complaints that they pay the same bills they used to, although they now use less power.

However, government has since allayed people’s fears, saying the commissioning of Bujagali Hydropower Project would increase power supply at reduced tariffs. However, Mr Godfrey Ssali, an official of the Uganda Manufacturers Association, warned that the development could translate into civil strife that would further taint the government’s image.

Dar es Salaam, Tanzania-Large-scale electricity users will have to dig deep into their pockets starting next week, when a sharp rise in electricity tariffs is expected. The cost of power will go up by up to 40.29 per cent, according to Energy and Water Utilities Regulatory Authority (Ewura) director general Haruna Msebu. Domestic consumers who use up to 50 units a month will not be affected though.

The price hike follows an emergency tariff application from the Tanzania Electric Supply Company Limited (Tanesco), which has the approval of the Ministry of Energy and Minerals.

Tanesco had asked for an increase of 155 per cent, arguing that operational costs had risen due to emergency power plants and extensive use of its own thermal generation plants to address power shortages. Some of the firm’s reasons were quashed at a stakeholders’ consultation that included Ewura’s consultative council, interveners and the public.

Tanesco’s application included costs not related to the emergency, the director general revealed. The firm also did not have a cost reduction plan and had a history of poor recovery of doubtful debts. Moreover, it intended to continue using a preferential rate for its staff.

There were also concerns about high electricity loss, Taneso’s laxity in collecting outstanding debts, high rates of doubtful debts and the fact that the Zanzibar Electric Corporation (Zeco) had not paid its own bills.

Tanesco’s litany of woes also included customer care that was described as “poor”. The signing of contracts “without bothering about the aftermath” also came into question.

“After some consultations with the government,” Mr Masebu said, “it (the government) agreed to convert the loan bridge finance of Sh136 billion previously issued to Tanesco into a grant.”

 

The government also has exempted imported fuel for running emergency power plants from taxes in the range of Sh415 per litre for gas oil and Sh40 per litre for heavy fuel oil while also committing continued support to Tanesco on payments to Independent Power Tanzania Ltd in the range of Sh18 billion per annum.

“In that situation, we found no reason as to why 155 per cent should be increased to the current cost…so the average tariff will be 40.29 per cent starting next week,” the director-general declared.

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