Uganda electricity tariffs likely to be reduced

KAMPALA - Ugandans are likely to pay less for every unit of electricity they consume for the last quarter of the year (between October and December).

Although the sector regulator, the Electricity Regulatory Authority (ERA) is yet to pronounce itself on the tariffs that shall be applicable for the last quarter of the year, all indicators seem to be pointing towards a reduction in the enduser tariffs for the period.

ERA considers different factors during the quarterly determination of the tariff and the performance of the Ugandan Shilling against the US dollar, changes in the electricity generation mix, international fuel prices, core consumer price index and US producer price index.

However, the exchange rate (performance of the Ugandan Shilling against the US Dollar) is the dominant factor considered during the tariff setting due to the fact that the majority of the inputs used in the subsector such as transformers, oil, cables are imported and hence paid for in dollars.

According to Dr Geofrey Okoboi, ERA’s director economic regulation, the Uganda Shilling has appreciated by 0.82 percent against the US Dollar, from sh3630.22/$ in November last year to sh3600.38/$ as at August this year.

But the movement in August was a slight appreciation from sh3602.63/$ reported as at May 31 this year.

On the other side, the international price for crude oil as at the end of September 2017 slightly increased to $49.6 per barrel compared to $49.2 per barrel registered in May this year.

However, this is still below $51.9 per barrel used in the determination of the 2017 base tariffs.

This also represents a 4.64 percent reduction in international fuel prices from the base period despite a 0.81 percent increase from the third quarter.

Should the tariffs be lowered, it shall be third successive time it will be happening since the year began, despite a hike in the first quarter of 2017 in relation to the last quarter of 2016.

– NEW VISION.