Uganda: Fuel Prices Become More Sensitive

Ugandans will now more than ever begin to monitor the price of oil at the world market given that it is becoming the biggest factor in the country’s energy equation.

Last week, the Electricity Regulatory Authority (ERA), the sector regulator, announced big increases in the power tariff across the five classes of electricity users in the country.

The tariff for domestic consumers, commercial users, medium industrial users, street lighting and large industrial users have gone up by 37% for the first four classes and 58% for large industrial users.

As the country looks around for answers to the crippling power crisis, it is ever being compounded by the rising fuel prices. Early last week, the price of petrol and diesel went up. In the face of a 12-hour a day load shedding schedule, the rise in fuel prices means increases in the operating costs of businesses.

This means that on all fronts, Ugandans will have to pay more for their energy – a scenario born out of an energy shortfall of 190MW during the peak evening hours and 90MW during the day. Effective June 1, 2006, the new tariffs, agreed upon by ERA on May 4, 2006, following talks with the Uganda Electricity Distribution Company (UEDCL) will apply. Overall the increased tariff is a reflection of the higher costs imposed by thermal generation.

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