The energy regulator has made a U-turn and increased electricity costs by 15.7 per cent, reversing the January cuts by the former President Uhuru Kenyatta administration, in what has handed consumers a twin blow in the wake of higher fuel prices.
The Energy and Petroleum Regulatory Authority (Epra) also quietly hiked pass-through costs last week, including fuel, forex and inflation adjustments, pushing the cost of a kilowatt hour unit to Sh25.3 for domestic consumers who use more than 100 units a month.
This means that with Sh1,000, consumers on the over 100kWh tariff would now get 39.5 units of power, down from the 45.7 before the electricity cost review.
The heavier consumers and industries will see their power costs rise even higher since the pass-through costs now account for more than a third of power bills.
This will have a direct effect on the cost of agricultural and industrial production, transportation, and cost of feed, all of which will reflect on consumer prices for food and manufactured goods and raise the overall cost of living. Consumers could find themselves spending over 30 per cent of current prices on different products, say analysts.
High fuel cost is expected to raise manufacturers’ out costs, “resulting in more pain for consumers.
This is because the price of fuel cascades across the value chain,” Kenya Association of Manufacturers Head of Policy, Research, and Advocacy Job Wanjohi said.
Consumers in August bore the sharpest rise in the cost of living in more than five years, hurt by a failed maize flour subsidy, rising fuel costs, and a weakening shilling.
Read also; Govt Relies on Imports to Lower Electricity cost.
