Parliament on Wednesday asked government to explain the high retail power tariffs in the despite the President’s promise to make electricity affordable.
Hon. Elijah Okupa told parliament that house earlier supported the tax waiver to Bujagali hydropower project on account of the government promise to lower the tariffs to about Ugx. 181.
Due to high power tariff, It’s no longer commercially viable to do agro processing without stealing electricity due to the tariff level. Maize our staple crop is sold by poor farmers at as low as Shs.500 as farm gate price because the value chain must factor in an affordable end user price that is affordable to all households including the urban poor.
Using the Q4, 2016 period, Umeme bought a kilowatt hour or a unit of electricity at Ugx. 260.9/= and sold it to you on your YAKA meter Ugx.696.9/= for a domestic consumer (This figure excludes 18% VAT). This big margin between buying and selling price borders treason- says Activists Jannette Mugisha.
According to analysts and consumers, the current tariff price is still very high for an average Ugandan who lives on less than two dollars (Shs6,400) a day.
“We waived corporation tax, many months back. Have the tariffs come down?”The Deputy Speaker of Parliament, Mr Jacob Oulanyah asked. In response, the State minister of Finance for Planning, Mr David Bahati, promised to furnish the House with an explanation on Thursday.
Between May 2017 when Parliament exempted Bujagali Energy Limited from corporation tax and December, the Electricity Regulatory Authority (ERA) has reduced the tariff at least twice.
However, it has increased the base tariff from Ugx. 696.9 to Ugx. 718.9 This year.
Electricity Regulator Authority defended the increment, saying it was due to the depreciation of the Uganda Shilling against the dollar given the company secures her equipment’s in dollars besides several power consumers pay in dollars.
The company also cited increased investment that is required to wheel power from some power generation plants that government will commission this year.
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