Ethiopians have been enjoying low electricity tariffs for over a decade compared to their neighbouring countries in the east African region; however, that may change soon as government plans to increase tariffs four-fold.
According to the Addis Fortune, the Ministry of Water, Irrigation & Electricity has tabled a bill that will effect the upsurge.
It is reported that the last amendment of the power tariffs was made in 2005.
“This resulted in a depletion of profit earnings for the government,” said Seleshi Bekele, minister of Water, Irrigation & Electricity, during a discussion held with representatives from Addis Abeba University, the Ethiopian Railway Corporation, and several banks.
According to Seleshi, the government earned 7 billion Birr ($253 million) in revenue in the last fiscal year from electricity, which is significantly short of the 28 billion Birr ($101 billion) targeted by the government.
The country’s electricity tariff stands at 0.018 dollars per kilowatt hour, one of the lowest rates in Africa. Read more: EEP is calling on bidders to install mobile substations
Scrapping fixed electricity tariffs
In comparison to other countries in the east African region, ESI Africa reported that Kenya’s Energy Regulatory Commission (ERC) recently announced new electricity tariffs by scrapping fixed charges.
ERC said they have scrapped the fixed charge: “To ensure that there’s equity and consumers pay for power only when they consume, all fixed charges for all consumer categories have been removed. This is meant to reduce the many cost items in the customer bills & simplify understanding of the bills.”
“The overall unit cost of power [will] reduce from Kshs 17.77/KWh in 2017/18 to Kshs 16.64/Kwh 2018/19 representing an overall reduction of costs by 6% over the Tariff Control period,” the ERC statement explained.