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SMEs yet to reap from President’s power tariffs decree

It is exactly 30 days since President Uhuru Kenyatta ordered the Ministry of Energy to review downwards electricity tariffs for small and medium enterprises (SMEs).

The order, issued while apologising to the group, also saw the President admit his government had failed them.

By extension, the order had tasked the Energy Regulatory Commission (ERC) to review electricity tariffs with the aim of reducing the cost for SMEs within 30 days, but the order seems not to have been actualised to the letter.

As a matter of fact, the closest to reducing the cost of energy happened when the ERC announced relief for households consuming a maximum of 100 kilowatts per hour (kWh), who are now paying reduced charges of Sh10 per unit, after increasing the lifeline (subsidy) threshold to 100 units, from 10 units announced in July.

The new deal also saw small businesses that consume up to 100 units pay a reduced charge of Sh10 per unit from Sh15.60. All these before factoring in the various variable pass-through charges including 16 per cent value-added tax, fuel cost charge, forex charge and inflation.

According to ERC director general Parvel Oimeke, the new lifeline tariff is meant to accommodate more households in informal settlements, peri-urban and rural areas and cushion them from the increased cost of living.

“This will cover 5.7 million customers,” said Oimeke. However, the new deal seems to have left out most of the SMEs particularly in the manufacturing sub-sector who had banked on the presidential directive to ease the cost of doing business.

The presidential order which was issued a month ago was meant to respond to the immediate needs of the SME community.

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