Consumers should brace themselves for a 10% hike in electricity tariffs next year.
Power distributor, Umeme, has proposed that tariffs for domestic consumers be increased by 9.95% effective next year from UGX524.5 to UGX576.69 per unit consumed.
Umeme’s head of communications, Henry Rugamba, says the company submitted this proposal among others, because it was asked among other players in the sector to do so, by the Electricity Regulatory Authority.
Electricity prices have been going up since 2005. In 2005, domestic consumers paid sh212.5 per unit compared to the current sh385.6 and the country last increased the end-user tariffs in January 2012. The increment then was as a result of the government scrapping subsidies for electricity consumers because the government simply could not afford to continue paying.
Rugamba added that power supply tariff is mainly driven by the power generation costs.
The reliance on the more expensive diesel generation, as well as movements in the currency exchange rates, will continue to have a significant impact on the end-user tariffs.
This will necessitate continued provision of government subsides in order to maintain the end-user tariffs, he said.
Umeme has also indicated before that higher tariffs would help it meet the power purchase costs.
The Uganda Electricity Transmission Company Limited, the sole buyer of bulk electricity from the generation plants, sales it to the power distribution companies for between Shs191.79 and Shs248.99 per unit.
But observers said the Government would implement a “stabilisation” programme to protect consumers, especially the low-income group, when the tariff hike takes effect.
Details of the programme have yet to be finalised.