Kiraitu yet to meet promise on levy review

By John Njiraini

Hopes of a further reduction in the cost of electricity have dwindled after Energy Minister, Kiraitu Murungi failed to announce changes on levies charged on consumption last week.

Despite promising to make a major announcement that would have resulted in a further decrease, Kiraitu failed to live up to his promise.

"We have finished consultations and next week, we plan to announce major reduction of electricity costs," he said on October 29.

Kenyans will have to make do with the measures announced by acting Finance Minister John Michuki.

Recent reduction

On October 31, Michuki cut the cost of power by 35 per cent after reducing Value Added Tax on electricity, industrial fuel, residual fuel oils and heavy fuel oil from 16 per cent to12 per cent.

This means domestic electricity users, who consume between 201 and 1,500 units will save Sh1,000 a month on their power bills, while those consuming above 1,500 units would save about Sh4,300. In the case of medium-sized industries, the operators stand to save about Sh120,000 a month, while large manufacturers will save Sh4.8 million.

But hopes of further relief seem to have been dashed after Kiraitu failed to announce changes on levies, which are imposed by the Ministry of Energy.

Taxes are set by the Ministry of Finance. The levies include rural electrification levy that stands at five per cent of the cost of units consumed, the Energy Regulatory Commission levy at three cents per KWH and fuel cost charge. By failing to undertake a review of the levies, Kiraitu has gone against President Kibaki’s order to the Ministries of Finance and Energy to review taxes and levies charged on electricity consumption.

In recent months, consumers and manufacturers have been suffering under the yoke of soaring energy costs that have gone up by between 65 per cent and 95 per cent since the beginning of the year.

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