Kenya Power has announced a reduction in electricity prices following a review of additional costs associated with token prices.
An analysis conducted by Kenyans.co.ke comparing tokens purchased on February 25 and March 12 revealed a decrease in both the Value Added Tax (VAT) and Fuel Energy charges.
These adjustments have resulted in Kenyans receiving more tokens this month. For example, individuals purchasing Ksh300 tokens are now receiving an additional 0.05 units compared to what they received last month.
The recent drop in prices is attributed to cheap hydropower which resulted from the heavy rains witnessed last year. The strengthening of the shilling against the dollar also played a factor in the drop.
The Breakdown
In February, for a Ksh300 purchase, Kenya Power charged Ksh34.88 for VAT and Ksh43.56 for Fuel Energy Charge.
However, in March the VAT was reduced to Ksh34.18 while the Fuel Energy Charge was reduced to Ksh38.46.
"Fuel Energy Charge is the added cost or rebates to the consumers as a result of fluctuations in world prices as well as fluctuations in the quantity of oil consumed by electricity generation. The fuel cost charge lags one month behind the actual price of the fuel.
"This money is collected by Kenya Power and all of it is passed on directly to electricity generation companies, who in turn pay fuel suppliers," Kenya Power explained on its website.
However, amid a drop in VAT and fuel charges, some other costs saw a slight increase. For instance, the Forex charge for a Ksh300 purchase was put at Ksh33.87. However, in March, that charge was increased to Ksh38.89.
This, therefore, explains why the prices have not dropped by a huge margin.
Notably, the recent price bares comes months after prices were reduced by Ksh3.44 per unit owing to changes in forex.
"Foreign exchange adjustment dropped from Ksh.6.46 per kilowatt hour to Ksh.3.22 per kilowatt hour owing to a decrease in the total foreign currency exchange payments made in January," Energy Principal Secretary Alex Wachira announced in February.
