ERA announced today that between July and September 2020, ordinary Ugandans classified as domestic users will pay 750.9 Shillings per unit of electricity they use. This is the same price as what Ugandans paid between April and June 2020.
Ugandans will pay the same for electricity in July to September as they paid in April to June
Ugandans will not see the relief on the money they pay
for electricity as Electricity Regulatory Authority (ERA), the industry regulator,
has decided not to change the tariff for the period to the end of September 2020.
ERA announced today that between July and September
2020, ordinary Ugandans classified as domestic users will pay 750.9 Shillings
per unit of electricity they use. This is the same price as what Ugandans paid
between April and June 2020.
This effectively means that for six months from
April 2020 to September 2020, Ugandans have only seen just 0.8 Shillings
reduction in what they pay for electricity. Between January and March 2020, Ugandans paid 751.7 Shillings per unit.
The tariff for commercial consumers and large
industries for July to September have also stayed the same as in last quarter
at 645.6 Shillings and 361 Shillings respectively. According to ERA, the current tariffs have been
determined after the consideration of the international oil prices, the exchange
rate of the Uganda Shillings against the US Dollar, and inflation.
Some of these parameters have changed since April
2020 when the price of electricity was last set. For instance, in April, ERA
quoted the international oil prices at USD 55 per barrel. It has since dropped
to USD 25.1 per barrel. This means that the country is now importing cheaper
oil to run generators and transformers which would have helped in reducing electricity
Also, the Uganda Shilling has gained value against
the US Dollar since May but ERA relied on high rates, an indicator that they expect
the Shilling to lose value in the coming months.
Another reason why the power tariff has not been
reduced is because of the drop in consumption of electricity. This means that
the few people who are consuming must pay for the redundant power that is not
Last month, the Ministry of Energy Permanent Secretary Robert
Kasande said electricity consumption had fallen
below the average level and payments from some consumers, some of whom are
government agencies and health facilities were not forthcoming.
Uganda’s electricity agreements are
designed in such a way that it is a “take or Pay” which means that power
generated must be paid for whether used or not. The country has not fully opened from
the coronavirus disruption and some of the factories, the biggest consumers of
power, are majorly operating below capacity.
Selestino Babungi, the Managing Director of power distributor Umeme, said 67.7 per cent of their power consumers were
factories and many of these were either closed or operating at a minimal
capacity. This meant less power was used.
He also said that such activities as entertainment, hotel services
also consumed power yet many have been closed. Many of these remain closed more than 100
days after the lockdown was implemented. This means those consuming today will bear the cost of those not consuming.
For government facilities, Kasande
indicated last month that the government would pay
their power bills. A loan facility of 450 billion Shillings is being sought for