By: Lloyd M’bwana
The country’s electricity consumers are expected to dig deeper into their pockets come January 1, 2016 following Malawi Energy Regulatory (Mera) increase of electricity tariff by 13.7% barely a month after the same utility body hiked electricity tariffs by 13.5 % .
The increase in electricity tariff comes amid continuous blackouts causing the country to lose millions of kwachas due to low production even contributing to deaths in public hospitals.
In a press statement dated December 22, which is also available to The Maravi Post signed by Mera’s Board Chairperson Dingiswayo Jere states that electricity tariffs will be increases come January 1, 2016 from an average of MK40.69 per/kilowatts hour to MK53.69 per kilowatts hour (US$0.8 per kilo watts hour.
According to Jere, the board’s role stipulated in section 9 of the Energy Regulation Act revolved to increase the tariffs in keeping with promoting the interests of consumers in respect to energy prices and charges with quality of energy suppliers.
“Based on Escom’s performance in the 2014/2015 fiscal year, it has granted the utility a 13.73 percent tariff increase as the second tranche of the base tariff with effect from November 2, 2015. Therefore, the average increase tariff from MK35.69 per kilowatt hour
(kWh) to MK40.69/kWh looking into account the impact of movements in the micro-economic fundamentals of the exchange rates and inflation up to June 30, 2015.
“Therefore, Mera board agreed to grant Escom a 24 percent ATAF-based tariff increase which moved the tariff to MK50.33 per kWh though the board resolved that implementation increase be delayed for few months in order to cushion consumers from its impact”, observed Mera’s Board Chairperson Jere.
Mera added that on December 2, the Kwacha had further depreciated to MK612.38 major foreign currency including the United States Dollar and inflation rate went up to 24.7 percent in October 2015.
“The Mera Board noted that the impact of both inflation and exchange rate movement resulted in 6.67 percent increase in the tariff which was beyond the statutory five percent (+5%)threshold for revising tariffs and therefore the electricity qualified for an upwards
adjustment”, concludes the Mera statement.
However, John Kapito, Consumer Association of Malawi’s Executive Director has described the tariff increase as shocking considering the fact that Escom has outstanding issues with its customers on poor performance saying such a move was an insult to Malawians.