Electricity Tariff Increase Could Trigger Price Hikes - CZI
Confederation of Zimbabwe Industries (CZI) president Kurai Matsheza says another electricity tariff increase could trigger a rise in prices.
This comes as manufacturers, who were seeking the Government’s intervention on umbrella US$ billing, were told to embrace it and expect a cost-reflective tariff by the Minister of Energy and Power Development, Zhemu Soda.
Speaking to Business Times, Matsheza said the development will trigger price increases, as the businesses will pass on the cost to consumers to survive. He said:
We engaged the Energy and Power Development minister [Soda Zhemu] over the blanket US$ billing and his response was the billing was justified and the current power tariff was not cost-reflective despite an increase to around US$0.12 per kWh from US$0.09/ kWh.
Last month, captains of industry and ZESA held a meeting on power billing in USD but the meeting proved fruitless after the power utility rejected local companies’ proposals.
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Manufacturers wanted the Zimbabwe Electricity Transmission and Distribution Company (ZETDC), a unit of ZESA Holdings, to have the US$ bills to be matched to the proportion of forex sales but the power utility rejected the proposal and insisted on a blanket bill.
Matsheza said the tariff for exporters was way above the regional average of US11.7c/ kWh. He said:
ZETDC told us the billing in US$ for exporting companies and those who are generating US$ through local sales should pay 100% in forex.
We raised an issue to say these blanket groupings may not be ideal. Whilst we understand the need to raise US$, why didn’t they look at the individual customer and say to what extent do you generate US$ sales and bill accordingly?
Captains of industry are arguing that if one is an exporter and exports at an extent of 50% that is what must be billed.
However, according to CZI, Zhemu said the sub-economic tariff had left ZESA in a crisis.
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