Electricity tariffs drop for fifth consecutive quarter

Lower international crude oil prices behind drop in electricity tariffs for the fourth quarter of 2019

Electricity prices have fallen for the fifth consecutive quarter, thanks to a decline in international crude oil prices, according to a tariff schedule released by the Electricity Regulatory Authority.

The end-user tariffs for electricity supplied by Umeme Limited, Uganda’s largest energy distributor, have reduced by a weighted average of 0.5% in the final three months of 2019 compared to the third quarter, the schedule shows.

Average tariffs for extra-large industries declined the most, by 0.7%, while domestic consumers and street lighting had the smallest falls of 0.3% to a per-unit charge of Shs752.5 and an average of Shs370.4, respectively.

Electricity tariffs (Shs/kWh) for Q4 2019
Consumer category Q4 (October to December) Q3 (July to September)
   Peak Shoulder Off-peak Peak Shoulder Off-peak
 Domestic First 15 units: 250
Above 15 units: 752.5
First 15 units: 250
Above 15 units: 755.1
 Commercial  863.6  664.7 408.6  868 668.1 410.9
 Medium industries  771.4  593.8 364.3  776  597.4  366.7
 Large industries  477.5  367.6  236.3  480  369.5  236.7
 Extra-large industries  406.4  312.8 202.3  409.8 315.4  202.4
 Street lighting  370.4  371.4

Electricity tariffs have now dropped for the fifth consecutive quarter, although the latest decline is the slowest in three quarters.

The reduction in power prices was the result of lower international crude oil prices. The international fuel price reduced from $63.8 per barrel used in the determination of this year’s base tariffs to $59.6 as at the end of September 2019, according to the regulatory authority, resulting into a positive fuel adjustment factor.

At the start of each quarter, ERA adjusts the annual base electricity tariffs in line with changes in inflation, the foreign exchange rate, and international fuel prices. The slight weakening of the Uganda shilling against the US dollar, and the increase in Uganda’s core consumer prices and the US producer price index were neutralised by the strong fall in crude oil prices.

The tariffs are applicable to consumer bills calculated from meter readings taken between October and December 2019. They apply only to customers of Umeme Limited, which will supply an estimated 94.3% of the electricity generated in Uganda in the second half of 2019.