Electricity Tariffs ‘Reduced’ By 0.7 percent

Uganda’s electricity tariff for the next three months from April 2014 has been reduced marginally by 0.7 percent, due to reduced global fuel prices. The Electricity Regulatory Authority today released the tariff for the second quarter of 2014, indicating a reduction of 3.3 Uganda Shillings on a unit of electricity.

Domestic consumers will have their end user rate drop to 517.3 Uganda Shillings from 520.6 Uganda Shillings in the first quarter. The commercial consumer, medium industrial and large industrial will pay 471.1 Uganda Shillings, 448.7 Uganda Shillings and 307.1 Uganda Shillings respectively down from 474.4 Uganda Shillings, 452 Uganda Shillings and 310.4 Uganda Shillings respectively.

The change is likely to have limited impact on the customer’s bill as a saving of 3.3 Uganda Shillings per unit is negligible, making almost no difference from the previous bill. The rate for the first 15units remained unchanged at 150 Uganda Shillings.

ERA at the beginning of 2014 started determining the end user tariff basing it on the movement of the dollar against Uganda Shilling, global fuel prices and the inflation rate.

The global fuel prices offset all other determinants of the end user tariff. The tariff could have increased however a fall in global prices in February 2014, contributed to the reduction in the cost.

“The international fuel price reduced from US$108 used in the determination of the Base Tariff to US$107.11 per barrel. The resultant effect is a negative Fuel Adjustment Factor of Ushs5.2 per killo watt hour,” the notice from ERA reads.

In February 2014, the Uganda Shilling depreciated by about 3percent against the Dollar. However, ERA base rate indicates a depreciation of 0.5percent, which led to price per kilowatt. Monthly core inflation – excludes price changes for food and energy – also increased in February 2014 by 0.4percent up from -0.2percent in January 2014.