EPRA: More suffering, power costs will jump higher in 2023 as President Ruto removes subsidy

 

After President William Ruto decided not to renew a multibillion-shilling subsidy started by his predecessor, Uhuru Kenyatta, homes and businesses would start paying 15% more for power as of this Sunday.

According to Daniel Kiptoo, director-general of the Energy and Petroleum Regulatory Authority (EPRA), the 15 percent discount would not be continued through December 31. 

 

This will result in expensive power and further pressure on the already high inflation rate.

President Ruto has slammed Mr. Kenyatta's subsidies on basic maize foodstuffs, calling them exorbitant.

Inflation has reached a five-year high as a result of the high cost of food and fuel, and the incoming president will need to deal with subsidy policies that officials fear might empty the nation's coffers.

In an interview with the Business Daily, Mr. Kiptoo stated, "By the end of December, we will return to the prices that were in effect before January." The new administration removed the assistance (subsidy) when it took office in August.

The subsidy, which would cost Sh26 billion, was designed to lower the high cost of living and promote economic development by bringing energy prices into line with those of other African countries like Ethiopia, South Africa, and Egypt.

In recent years, the Kenyan government has worked to increase investment in the industrial sector, which consumes a lot of energy. 

 

Because of the 15% discount that was announced in January, the price of buying 200 kilowatt hours (kWh) of electricity per month went down from Sh5,185 in December to Sh4,373 in January.

State-subsidized consumers who use 50 units per month saw the price drop to Sh796 in January from Sh945 in December, a 15.7 percent decrease. 

 

However, the rise in foreign currency and fuel adjustment levies on power bills have now eliminated the 15% reduction.

The country's hydroelectric dams' low water levels and excessive dependence on diesel-powered generators to generate energy are to blame for the shaky shilling, rising fuel surcharge, and foreign exchange adjustment expenses.