Energy minister Ruth Nankabirwa addresses journalists at the Uganda Media Centre on January 2, 2024. PHOTO/ABUBAKER LUBOWA
Domestic consumers of electricity will now save up to Shs20.7 on every unit they purchase. This is after the sector regulator, the Electricity Regulatory Authority (ERA) announced new power tariffs that will run between January and March.
The new tariffs released by ERA at the Uganda Media Centre yesterday indicate a general reduction of between Shs10 and Shs30 across the 10 power consumption categories.
Sector players from the trading and manufacturing sector welcomed the reduction but asked the government to do more because this is merely a small step towards attaining the required tariffs that enable mass production and inform product price reduction.
According to the new tariffs, a unit for domestic consumers that costed Shs796.1 between October and December last year will now go for Shs775.7 in the next three months.
Commercial users will part ways with Shs575.2 per unit down from Shs599.9 they paid last year. Medium industrial manufacturers, the new end-user tariffs, indicate will pay ShsShs417.8 per unit down from Shs448.
A new category of medium industrial services has also been introduced, and it will cost Shs434.5 per unit.
Unlike the medium industrial manufacturers’ category, which targets medium industries that do value addition, the medium industrial service category, according to Mr Ziria Tibalwa Waako, the chief executive officer, targets institutions like hotels that are in the service industry, but not in value addition.
Large industrial manufacturers who consume beyond 500,000 units will buy each unit at between Shs333.9 and Shs351.5 from the previous between Shs362.2 and Shs378.6 while their counterparts who are in the service sector, but consuming similar units will buy at Shs367.1.
A worker on duty at the Karuma Hydropower Dam switchyard construction site supervised by Uganda Electricity Transmission Company last year. PHOTO / TOBBIAS JOLLY OWINY
Extra-large industrial power consumers have had their unit cost reduced by between Shs15 and Shs20, while streetlights, public universities, hospitals, police, and army barracks will buy each unit at Shs360.
The ERA board chairperson, Dr Sarah Kanaabi Wasagali, said the reduction represents a 5.2 percent scale compared to the tariffs of the fourth quarter of 2024, reducing the cost of delivery of electricity services by Shs155b.
“The creation of the Public Amenities Tariff category ensures affordable electricity for public amenities, including hospitals and street lighting, reflecting the Authority’s commitment to Environmental, Social, and Governance (ESG) priorities. Eligible consumers are encouraged to leverage this development to enhance social services,” she said.
Energy minister Ruth Nankabirwa said the 5.2 percent reduction in the weighted average end-user tariff
achievement has led to saving the sector, the end-user consumer, and the economy.
“This underscores government's commitment to progressively making the cost of electricity affordable to support industrialisation, foster socio-economic transformation, and improve the wellbeing of all Ugandans,” she said.
Industrial players react Speaking to Monitor yesterday, different electricity consumers welcomed the reduction, with mixed reactions. Some said it is a significant move while others noted that much has to be
done.
Mr John Walugembe, the chairperson of the Federation of Small and Medium-sized Enterprises (FSMEs), said the reduction is a good move.
“This will reduce the cost of making business, but our request is most of these small start-ups work from home and produce, unfortunately they are charged the same as the ones consuming domestically and thus our request is ERA to in future revise the rates in and have a category of small-scale cottages tariff for home producers,” he said.
A power technician fixes a transmission line. PHOTO/FILE
Dr Ezra Muhumuza, the executive director of the Uganda Manufacturers Association (UMA), said the reduction will not be felt because the cost of electricity is still high.
“The reduction is a good move but a mere attempt because when you look at manufacturing, we need a drastic reduction. That is why we have always advocated for a power scheme that will give us a marginal reduction in the sense that you tell me that if I consume and reach a certain number of the unit, the rest are subsidised,” he said.
He added: “It is difficult to say that the reduction will cause a price change because the ERA reviews tariffs quarterly, yet for us our prices are set for a year, two or three. Generally, the cost of power for industrial production is still high.”
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Traders under their umbrella body of the Kampala City Traders Association (KACITA) Uganda said they will not feel the reduction because of the cheating nature of the landlords.
Kacita chairperson Thaddeus Musoke Nagenda, said: “The landlords are selling electricity at a higher price to tenants and our request is the installation of Sub-yaka meters in each shop. Another problem is substandard meters where power is depleted in an unknown way. If the government can work on that, we shall be good to go.’’
In her address yesterday, Ms Nankabirwa said the government would continue revising the tariffs downwards until the majority of Ugandans can access electricity and use it reliably.
“I am hopeful that as we transit to cheap cost of capital for investments in the distribution segment following the end of the Umeme Ltd concession, the tariff shall continue to reduce starting with that of manufactures to across all tariff categories,” she said.
Ms Nankabirwa added: “I congratulate the regulator for creating a specialised public amenities tariff category that takes care of our public institutions, especially referral hospitals across the country. A reduced tariff of Shs360 per kWh from 775.7 is a positive signal in supporting the health sector.”
Updates on oil and gas
Ms Nankabirwa said the developments in the oil and gas sector are promising, with Tilenga, which is expected to produce 190,000 barrels of oil at 62 percent complete while its Kingfisher counterpart is at 76 percent.
“The Tilenga project has successfully drilled 93 out of the 150 wells targeted for first oil out of the planned 426 wells for its operational life, with civil works at the industrial area nearing completion. Notable progress as of December 2024 was recorded, with overall progress in readiness for First Oil at 62 per-
cent,” she said.
She added: “The Kingfisher project also achieved significant milestones. A total of thirteen (13) production wells out of the planned 17 wells needed for First Oil had been drilled to Total Depth (TD) by December 2024. Notable progress as of December 2024 was recorded with overall progress in readiness for First Oil of 76 percent.”
An oil rig in a well pad in Kingfisher Development area in Kikuube District. As Uganda prepares to become an oil producing nation, investments continue to reshape key developments in the Bunyoro Sub-region. PHOTO/ALEX ASHABA
Civil works on the East African Crude Oil Pipeline (Eacop), which will transport crude oil from Uganda to Tanzania, she said continued on schedule in both countries.
A total of 1,100kms of line pipe, she noted, have been delivered to Tanzania out of the expected 1,443 km. The completion of the thermal insulation plant in Tanzania and the delivery of insulated line pipes marked critical milestones.
“Land acquisition for Eacop on both the Tanzania and Ugandan side has progressed to 99 percent, indicating the meticulous process undertaken while addressing any emerging issues through the established grievance management mechanism,” she said.
The establishment of the Kabalega Industrial Park in Buseruka Sub-County, Hoima District, she said advanced significantly in 2024, with the airport and key infrastructure projects, including a substation and water reticulation systems progressing well, with the park expected to drive industrial growth and
support Uganda’s oil and gas sector.
On the Uganda National Oil Company (Unoc) sole fuel importation plan which was activated last year, Ms Nankabirwa said: “I am happy to inform you that we continue to meet the above objectives as we work with the oil marketing companies to ensure the benefits are seen at the pump. The country is well supplied with petroleum products and there has been no shortage throughout the year 2024. Pump prices have been competitive and are constantly on a reducing trend.”
She added: “Uganda predominantly imports its petroleum, with over 90 percent arriving through Kenya’s Mombasa port, supplemented by imports via Tanzania’s Dar es Salaam port. Our market-driven approach allows supply and demand to dictate pump prices naturally.”
LPG initiative
On the Liquefied Petroleum Gas (LPG) initiative, the minister said: “With an annual growth rate of 9 percent in LPG usage, we continue to support this green initiative by exempting LPG from taxes, encouraging wider adoption across Uganda. We have so far distributed 13,733 LPG Starter Kits in Kampala, Mukono, and Wakiso, and we aim to reach 50,000 households across all cities by the end of this financial year.”
The LPG tank that was commissioned on November 28, 2024 at Uganda Petroleum Institute, Kigumba in Kiryandongo District. PHOTO/ISMAIL BATEGEKA
Minerals
The minerals development programme, she said, seeks to “increase the exploitation and value addition to mineral resources for job-rich industrialisation”.
Uganda is endowed with enormous potential for minerals with a favourable geological environment for world class economic mineral deposits.
“Several minerals have been discovered such as copper, nickel, gold, chromite, iron ores, tin, tantalite, tungsten, limestone, marble, graphite and gemstones, and many more. The mineral re-
sources in Uganda are key in addressing energy security, economic growth, infrastructure development and agricultural production- food security,” she said.
