The Ministry of Energy run by former Kericho Senator Charles Keter is set to hike consumer prices of electricity and petroleum products if Parliament adopts it’s taxation formula seeking to increase funding for Energy Petroleum Regulatory Authority (EPRA).
The formula proposed by Keter’s ministry will see EPRA’s levy on petroleum charged at up to 1% of the combination of the landing, transport and storage charges on fuels and the current fixed charge.
Keter’s ministry also wants consumption charge for electricity in his proposals that have supported by the Energy committee of the National Assembly.
EPRA is calculating the two levies in shillings per litre for fuel and shillings per kilowatt-hour for electricity.
According to EPRA’s pricings for the current month, petroleum regulatory levy is Sh0.25 for every litre of petrol, diesel and kerosene and Sh0.30 per kilowatt hour.Adoption of the proposals will see EPRA levies fluctuate from time to time based on the landed cost of petroleum products and the changes in the energy charge for electricity consumers.
The ministry’s Principal Secretary Joseph Njoroge said the move is aimed at boost collections by EPRA to fund its operations.
“It (regulatory levy) is a percentage of energy charge for electricity and a percentage of cost of fuel without the tax elements. We made the proposal because EPRA is expected to play bigger roles in regulating the upstream and midstream oil sectors hence their budget will change going forward.” Njoroge said.
The proposed formula will see consumers of more than 10kWh of electricity paying an additional Sh0.12 per kilowatt-hour (kWh) on the current Sh23.36.
The proposal a step a step closer to being endorsed by the current parliament that rubber stamps everything that punishes the taxpayer.
Mr Njoroge did not reveal the amount EPRA intends to raise from the new tax formula as it seeks more funds for its operations.
EPRA was given the mandate to regulate the petroleum sector, adding to its watchdog role over the electricity industry last year.
The regulator will rely on the petroleum and electricity levies to fund its operations that include conducting raids to curb theft and adulteration of fuels.
The proposal to hike prices come in less than two months after Kenya Power received more room to hike electricity prices to cover for their traditional losses.
EPRA had also reviewed consumer tariffs in August then gave the loss making Kenya Power greenlight to recover system losses equivalent to 19.9% of power it buys from KenGen, up from 14.9%.
The Ministry of Energy is also aware and comfortable with the August review resulting into an increase of Sh0.20 per kilowatt hours (kWh) in the retail prices of electricity.
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