The Electricity Regulatory Authority has maintained energy tariffs for the first quarter of 2026, using a decline in global oil prices to absorb the impact of a weakening Ugandan shilling. The decision provides continuity for industrial consumers during a period of currency volatility.
The regulator’s quarterly review, which adjusts tariffs for electricity supplied by the Uganda Electricity Distribution Company Limited based on exchange rates, fuel costs, inflation and the energy generation mix, found competing macroeconomic forces in rough equilibrium. While the shilling depreciated to Shs3,624.91 against the dollar — from Shs3,552.14 in the previous quarter — international oil prices fell from $70.97 to $64.46 per barrel, a 9 per cent decline that offset currency pressures.
For Uganda’s largest industrial consumers, the outcome extends a period of favourable pricing. Extra-large manufacturers will continue to pay Shs203.6 per kilowatt-hour for off-peak power, unchanged from the fourth quarter of 2025. Commercial and medium-sized industrial tariffs also held steady.
Year-on-year reductions persist
The stable quarter-on-quarter picture masks substantial annual adjustments. Since early 2025, the regulator has reduced tariffs for the largest consumers by 32 per cent, from Shs299.1 to Shs203.6 per kilowatt-hour. Large manufacturers saw Block 1 rates fall 14.5 per cent over the same period, from Shs351.5 to Shs300.4 per kilowatt-hour.
| Consumer Category | Q1 2025 (Avg. Ush/kWh) | Q1 2026 (Avg. Ush/kWh) | Change (%) |
| Domestic (Units 16-80) | 775.7 | 756.2 | -2.5% |
| Large Industrial (Block 1) | 351.5 | 300.4 | -14.5% |
| Extra-Large Industrial | 299.1 | 203.6 | -31.9% |
These reductions reflect efforts to absorb excess generation capacity and improve industrial competitiveness. Domestic consumers, though subject to higher absolute rates, have also benefited: mid-tier residential tariffs (for consumption between 16 and 80 kWh) declined from Shs775.7 to Shs756.2 per kilowatt-hour year-on-year.
Read: Understanding your electricity bill, and how power tariffs for domestic consumers work
UEDCL transition proves seamless
The pricing stability is notable given the recent structural changes in the sector. Distribution responsibilities transferred from Umeme Limited to the state-owned Uganda Electricity Distribution Company Limited in 2025, a shift that some observers feared might introduce operational inefficiencies or pricing unpredictability.
Instead, the transition appears to have proceeded smoothly. The government’s pricing strategy — maintaining a substantial differential between industrial and domestic rates — signals a deliberate policy of using subsidised power to support manufacturing and exports.
The regulator’s capacity to balance competing macroeconomic variables offers a measure of certainty for Uganda’s industrial sector. Whether this equilibrium can be sustained will depend on the trajectory of both global oil markets and the shilling’s exchange rate in coming quarters.
