Tanzanian_flag

21 August 2008 – Tanzania may face increased electricity tariffs if the Energy, Water and Utility Regulatory Authority (EWURA) approved increased in natural gas distribution tariffs.

Multi-year tariff increases have been applied for by The Pan African Energy Co and the Tanzanian Petroleum Development Corporation (TPDC) for the period 2008 – 2025.  They are proposing unbundled tariff for the power sector and industrial customers from September 2008 – December 2009.

Power generation tariffs, according to TPDC would rise from $ 0.082652 per Mmbtu (million British thermal unit) to $ 0.139 per Mmbtu, representing a 68.17 % rise.

Charles Mdondola of the Confederation of Tanzanian Industries is concerned this move would have a direct impact on industry.  

"The application for such a great increment should be investigated by the relevant authority as it may cause Tanesco tariffs to increase, with a negative impact on industries," he said.

According to Mdondola, the total tariff is "more than ten times the earmarked pricing type charged if the cost of unregulated component is included. Unregulated component is the one bearing international oil price from an accepted formula."

The ministry of energy and minerals, and the Ewura consumer consultative council, have opposed on the move due to the negative impact on consumers.

Geoffrey Msella, chairperson of the government consultative council said PAT and TPDC aimed at bringing prevailing tariff determination arrangements to consistency with the best international practice.

They also aim at increasing transparency in the gas value chain, to reduce regulatory uncertainty amongst the stakeholders and facilitate fast track infrastructure expansion, he emphasised.