Electricity tariff eats into income

An analysis by the Centre for Social Concern (CfSC) on the effects of electricity tariff hike shows that consumers will have to be paying an average of K10 105 per month on electricity, up from K7 714.

This follows the recent approval by Malawi Energy Regulatory Authority (Mera) to enable Electricity Supply Corporation of Malawi (Escom) raise electricity tariff by 31.8 percent over a four-year period, with the 20 percent effected on October 1.

CfSC survey sampled 82 percent of households who live below the cost of living benchmark of K152 272 for an average family of six.

In an interview on Wednesday, CfSC economic governance programmes officer Lucky Mfungwe said the projected average increase will leave majority of the households with little disposable income to survive.

“If and only if corruption may be dealt with at Escom, the rise in tariffs will continue positioning Malawians worse off than the good intentions to capacitate the electricity body,” he said.

With an average income of K60 000 per month, Steria Chirambo, a Chilobwe resident in Blantyre, said yesterday she has cut on using electricity for cooking, ironing and lighting to survive.

“Sometimes I will have to go a day without switching on electricity,” she said.

Energy expert Grain Malunga, who is also former minister of Natural Resources, Energy and Mining, observed that while Malawi’s electricity tariffs are among the lowest in the region, implementing a policy to enable poor households access electricity would help boost accessibility.

“In some countries, there are deliberate policies to help pro-poor households access electricity at a cheaper cost. But because we do not have such policies, such households will really find it hard to cope with the rising cost of electricity,” he said.

When approving electricity tariffs, Mera board chairperson the Reverend Joseph Bvumbwe said the adjustment will vary on yearly basis, adding that the 31.8 percent would translate to an average tariff of K95.15 per kilowatt per hour (kWh) against K117.64/kWh which Escom requested, representing a 60 percent increase.

Under the $350.7 million (about K257 billion), Malawi energy compact, which wound up on September 20, the Malawi Government committed to a phased implementation towards a full-cost recovery tariff.

Mera said it has approved the revenue increase on the promise that Escom would provide power that consumers are annually paying extra for.

In its application, Escom has planned that power procurement costs would reach K718.9 billion, but Mera asked the company to reduce import costs.