Uganda: Power Tariffs Drop as Shilling Appreciates

Between January and March 2016, Ugandans will pay less for electricity compared to the last quarter after the shilling - a big factor in the setting of the tariff - appreciated against the dollar in the last couple of weeks.

The Electricity Regulatory Authority announced recently that domestic power consumers will pay Shs 651 per unit, down from Shs 667.4 paid in the three months to December.

Commercial consumers will pay Shs 587, from Shs 604.7 while large industries will pay Shs 369.4, from Shs 381.1. The current drop in the tariff, about 2.4 per cent, is, however, nowhere near the increment experienced in the last quarter where tariffs were hiked by 19 per cent.

But ERA said the drop has been necessitated by the shilling gain against the dollar - almost eight per cent since November. Its value increased from Shs 3,680 in October to Shs 3,370 as of Monday.

In its application for the tariff in November, power distributor Umeme wanted a benchmark for the shilling against the dollar to be set at Shs 3,695.25.

Another big factor in the power tariff is oil, which is used in power generation and in transformers. Global oil prices have dropped to $36 per barrel, the lowest level since 2006. Electricity prices are revised every quarter.