Kenyan electricity consumers will pay KSh 1.20 more per unit or an extra KSh 1 billion to Kenya Power this month on increased compensation to expensive diesel plants, putting pressure on households.
The energy regulator has raised the foreign exchange and fuel adjustment surcharges it levies on March electricity bills, hitting household budgets at time when petrol prices have hit a nine-year high.
The fuel surcharge has increased to KSh 3.54 per kilowatt hour (kWh) from February’s KSh 2.61, rising to the highest levels in 19 months.
The foreign exchange fluctuation has increased slightly to KSh 0.77 per kWh, compared with the previous KSh 0.66.
This means that electricity costs will increase by KSh1.20 per unit, inclusive of taxes, pushing the total bills to above KSh 1 billion given the monthly consumption of over 800 million kWh.
The costly fuel surcharge in power bills is linked to increased reliance on diesel-powered generators to produce electricity and the rise in petroleum prices.
The Energy and Petroleum Regulatory Authority (EPRA) has attributed the increased use of thermal-powered plants to reduced generation from cheaper Lake Turkana Wind Power and a breakdown in one of the country’s hydro-electric dams.
The ForEx levy comprises expenses incurred in foreign currency by power generators such as KenGen, the independent power producers as well as Kenya Power.
The additional electricity bills is a blow to households and businesses that are grappling with expensive fuel because of rising crude costs in the global market.
Motorists in Nairobi are paying KSh122.81 per litre of petrol from KSh115.18, representing a KSh7.63 increase, and KSh5.75 more for a litre of diesel at KSh107.66.
Petrol is now retailing at levels last seen in November 2011 while diesel is selling at the highest level since December 2018.
The rising electricity and fuel prices are expected to put more upward pressure on the economy where the year-on-year inflation rate rose to 5.8 percent in February from 5.7 percent in January.