Zimbabwe Energy Minister calls for Electricity Tariff Increase

BY YESMAN ANTOH-

Photo Credit: Shumbaenergy

NEW AFRICA BUSINESS NEWS, Accra, Ghana- REPORT FROM Zimbabwe indicates that Minister of Energy, Fortune Chasi is agitating for an electricity tariff increase.

The minister argued that current charges do not reflect the cost of producing and procuring power – despite recent utterances by finance minister, Mthuli Ncube that the government was reluctant to effect tariff increases in the sector.

Power utility ZESA Holdings has over the years been pushing for tariff increases but its applications for such have been turned down by the Zimbabwe Energy Regulatory Authority.

Fortune Chasi, Energy Minister of Zimbabwe
Photo Credit: MusicAfrica

Currently it is seeking a 30% tariff hike. Ncube told Parliament that a tariff increase was untenable given the state of the economy and would only add to inflationary pressures as it would spur price increases on other commodities.

He added that the government might consider product based tariff increases for miners.

However, Chasi said in a tweet on Monday that there must be a new philosophy around the issue of tariffs.

“The tariff must be cost reflective. The current tariff bears no semblance whatsoever to the actual cost of procuring power. It must. There must be a new philosophy around the tariff. Cost reflectivity is an essential ingredient,” he said.

He also warned that consumers who were not paying their bills for electricity consumption would be cut off.

“ZESA has a legal obligation to cut its losses. It cannot continue to supply power to people who do not pay. Switching off non-paying consumers is a real option. Be warned.”

Chasi said this is regardless of what or who you are. There are reports of many high-ranking government officials having debts running into tens of thousands of dollars.

Local authorities, domestic consumers, industry and commerce are also failing to settle their bills, partly because of economic hardships and also partly because they have been getting away with it for a long time.

As at May 2019, customers owed the utility 1.2 billion Zimbabwe dollars. Chasi said in an earlier tweet that he would meet industry and commerce to plead for payment.

ZESA said recently that it requires 15 million U.S. dollars a month to get 600 megawatts (MW)of electricity imports to ease the current load shedding which in recent days has seen domestic consumers getting seven hours of power in the middle of the night.

ZESA is currently generating less than 820 MW against a daily peak demand of 1,600MW in winter and 1,400MW in summer.

The power utility owes South Africa’s Eskom and Mozambique’s Hidroelectrica de Cahora Bassa about 80 million U.S. dollars for power imports and pressure is mounting on the utility to pay up before it gets any more supplies.  

BY YESMAN ANTOH, NEW AFRICA BUSINESS NEWS, BUSINESS & POLITICS, GLOBAL CORRESPONDENT

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