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Uganda: Era Shifts Focus to Two Power Consumer Groups, Cuts Tariffs

The Electricity Regulatory Authority (ERA) has reduced tariff for two consumer categories twice in a row while maintaining all the rest for more than nine months.

ERA, the company mandated with setting the price of electricity supplied in the country, has released tariffs that determine the price of electricity sold by Umeme from April to June.

In the new tariff, commercial and medium industrialists will enjoy a slightly reduced cost.

Commercial users, who include small scale industries, fuel pumps and millers among others, will now pay Shs639.8 from Shs642.2, while medium industrialists will pay Shs556 per unit.

Medium industrialists had been paying Shs560.2 in January.

Domestic consumers, who include households, will continue paying a subsidised fee of Shs250 for the first 15 units every month before paying Shs750.9 as it was in January.

Large industrial consumers had also been maintained at Shs361 per unit, while extra-large industrial consumers pay Shs301.7 per unit.

Street lighting, a bill payable by Kampala Capital City Authority was also kept at Shs370 as it was in January.

Speaking to Daily Monitor yesterday, Mr Julius Wandera, the ERA director corporate and consumer affairs, said the move to reduce tariff for the two consumer categories is a deliberate effort to spur growth in those sectors.

“Previously the concentration of the regulator has been on the extra-large and large industrial consumers to try to help be competitive on the market but now the focus of the regulator going forward is on the commercial to get a favourable tariff to become competitive on both the local and regional market,” he said.

Competitiveness of Uganda’s industrialists is especially key at the moment as the country joins regional treaties that will see the market welcome products from the entire African continent.

It is also critical as the country renews its import substitution agenda following a harsh realisation during the Covid-19 lockdown. The country during lockdown faced an economic slump in local demand as well as reduced importation of products.

The economic slump also led to a reduction in demand for electricity during the period which has since only started to pick up nearly close to the pre-covid era.

In January 2021, electricity demand recovered to 726megawatts. Electricity demand, collection rates and energy losses are key parameters when determining the price of electricity.

Collection and energy losses however have not been able to bounce back as the country recorded 17.5 per cent in losses as at December 2020.

Key parameters

In January 2021, electricity demand recovered to 726 megawatts. Electricity demand, collection rates and energy losses are key parameters when determining the price of electricity.

Collection and energy losses however have not been able to bounce back as the country recorded 17.5 per cent in losses as at December 2020.

Tariff parameters

The tariff also takes into consideration the exchange rate, inflation, producer price index and international fuel prices.

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