Page 14 - AfrOil Week 29

AfrOil PERFORMANCE AfrOil

Sluggish oil prices lead Uganda

to keep power tariffs steady

UGANDA UGANDA’S Electricity Regulatory Authority As such, ERA has opted to maintain electric-
(ERA) has reportedly identified sluggish crude ity tariffs at second-quarter levels in the third
oil markets as the main factor underlying its quarter of the year. In the second quarter, Ugan-
decision to keep electricity tariffs steady in the dan residential customers continued to pay
third quarter of 2020. UGX250 ($0.068) per kWh for the first 15 kWh
ERA has the legal authority to revise the tar- of electricity consumed and UGX750.9 ($0.20)
iff schedule each quarter, and it sets rates on the per kWh beyond that level. ERA also main-
basis of four factors, Monitor noted last week. tained its multi-tier tariff regime for commer-
It named those factors as fluctuations in world cial consumers at second-quarter levels, with
market prices for fuel, the exchange rate of the small businesses paying UGX645.6 ($0.17) per
Ugandan shilling to the US dollar, the domestic kWh, medium-sized industrial concerns pay-
core consumer price index and the US producer ing UGX570.9 ($0.15) per kWh, large indus-
price index. trial concerns paying UGX361 ($0.097) per
Between February and May, the newspaper kWh, extra-large industrial concerns paying
stated, three of these four moved in a direction UGX301.7 ($0.081) per kWh and operators of
that would usually cause power tariffs to rise. street lighting paying UGX370 ($0.10) per kWh.
That is, the shilling lost value relative to the dol- ERA has indicated that it will try to avoid
lar, while domestic core consumer prices and US tariff hikes for the time being. Uganda’s gov-
producer prices went up, it explained. ernment hopes that low prices will encourage
Nevertheless, world crude oil prices followed businesses to bring production levels back up,
a different track, dropping from about $55 per according to Monitor. ™
barrel in February to around $25 per barrel in
May. This decline also brought the price of fuel
used by Ugandan thermal power plants (TPPs)
down by such a significant amount that it out-
weighed changes in the other three categories.
It might even have triggered price cuts if
it were not for the fact that Ugandan energy
demand dropped by approximately 20% in the
second quarter as a result of the coronavirus
(COVID-19) pandemic, Monitor said. ERA
usually reduces tariffs when demand is high in
order to encourage consumption, it explained. Fuel costs are a factor in power pricing (Photo: File)

POLICY
NLNG responds to MP’s request

for investigation of missing funds

NIGERIA THE Nigeria LNG (NLNG) consortium has government.
denied allegations of unauthorised withdraw- It also denied that high-ranking officials –
als from an account used to cover dividend including Mele Kyari, the general managing
payments to its largest shareholder, Nigerian director of Nigerian National Petroleum Corp.
National Petroleum Corp. (NNPC). (NNPC), and Tony Attah, the managing direc-
In a statement, NLNG said there was no truth tor of NLNG itself – had played a role in the
to charges that $1.05bn had been taken out of removal of funds from the account.
the special federal account that takes receipt of The consortium asserted in the statement
NNPC’s share of dividends and then distributes that it had not taken any actions that violated
the money among the country’s three tiers of Nigerian legal norms.

P14 www. NEWSBASE .com Week 29 22•July•2020