Energy gasoline mark levy hits three-year high

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Economy

Monday August 16 2021

energy

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By JOHN MUTUA

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Summary

  • Epra in a explore acknowledged the gasoline mark mark for August has increased to Sh3.77 per kilowatt hour (kWh), up from Sh3.3 per unit final month.
  • FCC final hit identical highs in July 2018 when it stood at Sh4.60.
  • The upward thrust in FCC coupled with an elevate in Value Added Tax (VAT) approach the fee of a unit of electricity will upward push Sh0.14 this month, growing disaster to households and businesses.

Households and businesses face steeper electricity payments after the gasoline mark mark (FCC) hit a 3-year-high in a shaky economic atmosphere of low earnings on account of the vagaries of Covid-19.

The Energy and Petroleum Regulatory Authority (Epra) in a explore acknowledged the gasoline mark mark for August has increased to Sh3.77 per kilowatt hour (kWh), up from Sh3.3 per unit final month.

FCC final hit identical highs in July 2018 when it stood at Sh4.60.

The upward thrust in FCC coupled with an elevate in Value Added Tax (VAT) approach the fee of a unit of electricity will upward push Sh0.14 this month, growing disaster to households and businesses reeling from the coronavirus-caused economic meltdown.

“Stamp is on condition that every body costs for electrical vitality specified in Segment II of the acknowledged Time table will most seemingly be at risk of a gasoline vitality mark mark of plus 377 Kenya cents per kWh for all meter readings to be taken in August 2021,” Epra acknowledged within the Kenya Gazette.

VAT on electricity payments has increased to Sh3.43 per kilowatt hour (kWh) from Sh3.3, environment the stage for the upward thrust in energy payments this month.

As an illustration, consumers will obtain 40.17 objects for Sh1000, down from 40.37 objects for a identical quantity final month.

The upward thrust will survey the domestic energy consumers pay Sh24.89 per unit from Sh24.77, growing the burden on households hit by layoffs and wage cuts.

Epra didn’t convey what drove the upward thrust in FCC, coming months after the fee fell to Sh2.92 per kWh on lowered reliance on diesel vegetation on account of the continuing neutral correct rains across the country.

FCC had fallen consecutively in April and Would possibly per chance well— the principle time this year it dipped twice in a row, offering a reprieve to consumers.

The levy is influenced by the portion of electricity from diesel generators and has been on a decline following the heavy rains that started final November

Gasoline mark mark has been on a gradual upward push since Would possibly per chance well final year at the aid of the global recovery of costs in crude oil, growing the fee of diesel used for generating electricity.

It, alternatively, dipped final month to Sh3.30, coinciding with the fourth consecutive month that diesel costs had been kept unchanged to stem growing public outrage over the upward thrust within the fee of living.

The rising electricity costs pile stress on inflation as households and businesses private financial hardships on account of layoffs, wage cuts, and lowered earnings within the wake of the Covid-19.

The costs of vitality and transport bag a big weighting within the basket of items and companies that is used to measure inflation in Kenya.

Producers of companies and items are anticipated to ingredient within the increased mark of energy, unleashing pricing stress across the economy with ramifications on the fee of living measure.

The predicted elevate within the fee of electricity comes at a time of growing concerns on the Energy Rob Agreements (PPAs) between Kenya Energy (KPLC) and independent energy producers.

President Uhuru Kenyatta in March appointed a job power to review PPAs signed between Kenya Energy and all electricity generators to renegotiate vitality costs and varied terms downwards.

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