Zambians could pay a lot more for electricity as from July 2017, as the government seems set on phasing out energy subsidies.
The Zambian minister of Finance, Felix Mutati, announced on Tuesday that new “cost reflective power tariffs” were on the cards.
“Low tariffs have for a long time undermined the potential of the energy sector and the upward adjustment will go a long way to attracting investors,” he said at a French embassy-led regional conference on renewable energy in Lusaka.
How much the increase will be, is unclear, but it could be drastic, since government was spending a staggering amount – around USD10.8 million per year – to subsidise power to consumers. To illustrate, ZESCO sold its retail and commercial power at USD.0.06 (6 cents) per kWh while the cost was an estimated at USD0.12 (12 cents).
Mutati in his maiden budget presentation said that it was an expenditure government could no longer afford.
According to the minister, government had already engaged a consultant tasked with coming up with a reasonable tariff that would ensure, what he called a “win-win” scenario in the power sector.
REPRIEVE FOR BLACK OUT
Meanwhile the power Zambian power utility company, ZESCO has given a 14-day load-shedding reprieve to consumers in the provinces that were recently affected by one the longest power outages experienced by the nation.
ZESCO has exempted consumers from load-shedding in Muchinga, Eastern, Northern, Luapula and parts of Central province to compensate for losses and inconvenience suffered during the recent blackout that lasted for five days.
“The reprieve is aimed at cushioning the losses and inconvenience suffered by consumers in five provinces,” said Bessie Banda, senior manager marketing and public relations officer of the utility in Lusaka on Tuesday.
Ms Banda also reiterated its appeal to customers to minimize power usage by switching off during lull periods and using other alternative sources of energy where possible.