Relief as power charges come down

The Kenya Power and Lighting Company has applied the four-percentage points reduction on Value Added Tax charged on electricity.

The reduction of the VAT from 16 per cent to 12 per cent has consequently seen a drop in consumers’ bill payments for the month of November.

A survey by the Daily Nation has revealed that a number of consumers have received bills far less than what they used to pay in the previous months.

Those who talked to the Daily Nation indicated that they were paying between Sh1,000 and Sh800 less what they paid for the month of October. However some had not seen the difference on their bills.

“I’m surprised that some people are paying less for power, I’m actually paying more by Sh100 this month,” said a Mr Wainaina, a Nairobi resident.

A concerted effort by the government and reduction in international prices of crude oil used to generate power, could have succeeded in providing a relief on the cost of electricity.

The relief applied to both consumers and manufacturers if one is to go by the current prices. It took the intervention of President Kibaki to order the ministries of Finance and Energy to meet and review tax positions on electricity.

Domestic consumers

Further, the overall drop in fuel prices, especially crude oil in the global market may result to more relief.

In implementing the directive, acting Finance minister, Mr John Michuki had said that the cost of electricity would come down by an average of 35 per cent.

The reduction was expected to ensure that domestic consumers of between 201 and 1,500 units save about Sh1,000 per month in power bills while their counterparts who utilise over 1,500 units save about Sh4,300 over the same period.

Worst hit by the high costs were heavy manufacturers like cement firms that consume a lot of power. The firms introduced cost-cutting measures to save energy and keep steady their balance sheets.