ZESA considering power tariff increase in line with ‘run-away’ exchange rates

Harare – As inflation and exchange rates continue on an upward trend, the energy supply authority has indicated that it will be reviewing upwards the current power tariffs to help boost its operational efficiencies.

This was revealed on Thursday 19th of September 2019 during the Portfolio Committee on Energy and Power Development receiving oral submissions from the ministry representatives and various stakeholders on pre-budget consultations.

Following the 2019 mid-term budget presentation, government approved an increase in electricity tariffs from an average of ZWL9.86c/kWh to an average of ZWL45c/kWh for non-exporting businesses and an increase from an average of ZWL9.86c/kWh to an average of ZWL27c/kWh for domestic consumers.

Electricity tariff for ferrochrome smelters and other miners remained unchanged at US$0.067/kWh and US$0.0986/kWh respectively.

However, the power tariff has remained largely sub-optimal as a result of the continuous fluctuation in the value of the ZWL$ to other foreign currencies.

Zimbabwe Energy Regulating Authority (ZERA) acting CEO, Mr Eddington Mazambani said that if the current Zimbabwe Electricity Supply Authority (ZESA) tarrifs are to remain as they are, power supply may collapse in the near future.

He added that consultations with all relevant stakeholders will be carried out regarding the new tarrifs for the coming year.

The power distributor is owed large sums of money by various stakeholders from individuals to corporates and this has seriously impacted on its operational efficiency.

Evidence presented before the Committee revealed that ZESA has incurred a loss of about $4 billion due to exchange rate.

However, any upwards review in service charges does not come without negative impact to consumers whose real incomes have remained largely subdued in the face of soaring inflation.

Equity Axis News

Raynold Mhotseka

Raynold Mhotseka is a Journalism and Media Studies student at the University of Zimbabwe. He serves as a news writer at financial research firm, Equity Axis where he is currently on attachment. He can be contacted through the following email links, rayjnr.mhotseka@gmail.com and raynoldm@equityaxis.net.

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