Energy and Petroleum PS Joseph Njoroge. PHOTO | SALATON NJAU
The Energy ministry has disputed official data indicating that electricity prices have risen under President Uhuru Kenyatta’s administration.
Data from the Kenya National Bureau of Statistics indicates that middle class homes are paying more for power under the Kenyatta administration compared to the previous Kibaki regime — which had been blamed for making Kenya uncompetitive through costly electricity.
But Joseph Njoroge, the Energy and Petroleum principal secretary, has termed the KNBS data false, insisting that power prices have dropped.
“The arguments therefore being floated around that the government’s pledge for cheap power has not been fulfilled and that households are paying more for electricity today compared to 2012 is not true,” said Dr Njoroge in a statement while responding to a story in the Business Daily.
The KNBS data shows households consuming 200 kilowatt hour (kWh) paid Sh3,497 last month compared to Sh3,094 in December 2012, five months before Mr Kenyatta assumed power.
Higher tariffs offered to Kenya Power in 2014 are behind the rise in electricity cost in the period under review. The higher electricity prices have also been linked to the revision of value added tax (VAT) on electricity from 12 per cent to 16 per cent in September 2013.
Besides electricity, the prices of milk, newspapers, text books, fertilisers and mobile phone handsets went up as a result of implementing the new VAT.
The government said the purpose of the drastic VAT change is generating revenue for the nation’s development agenda including road and rail system improvements. “The KNBS data is authentic. The rest is politics,” said a KNBS official who spoke on condition of anonymity.
Dr Njoroge is basing his arguments for cheaper electricity on lower fuel cost levy in power bills, brought down by the injection of least cost geothermal to the national grid. But he does not mention the higher tariffs offered to Kenya Power and the higher VAT.
Kenya injected 280 megawatts of cheaper geothermal energy to the grid, leading to reduced use of expensive diesel generators and ultimately lower fuel cost charge.
An extra fuel charge is added to normal power rates depending on the amount of diesel generation used and global fuel costs.
The fuel levy now stands at Sh2.85 per kWh from Sh5.35 in December 2012, a drop of Sh2.50. But this gain was offset by the new Kenya Power tariffs brought into force in January 2014 and the second phase in July the same year that saw an increase in the fixed charge — payable regardless of consumption levels — and the energy charge, which account for more that half of the monthly power costs.
The fixed charge for domestic consumers rose to Sh150 per month from the Sh120 while the energy charge per kWh for those consuming above 50 units increased to Sh13.68 from Sh8.10, a Sh5.58 rise.
The Sh5.58 increase is higher than the Sh2.50 gain. The inclusion of the impact of the fixed charge and the four percentage increase on VAT further diminishes the impact of the additional geothermal power.
Businesses have in recent years complained that expensive power makes Kenya’s products uncompetitive.
Before the injection of geothermal power, the fuel charge had peaked at Sh7.22 in August 2014.
The share of geothermal electricity fed to the national grid stood at 43.7 per cent in November 2016, up from 33 per cent in July 2014, while thermal’s has dropped to 18.3 per cent from 33 per cent over the period.
Source: Business Daily