Why Your Electricity Bill is Increasing This Month

The Fuel Energy Charge (FEC) has risen from Ksh3.52 per unit in May to Ksh3.59 in June according to the Energy and Petroleum Regulatory Authority (EPRA) monthly review. 

The FEC is a pass-through cost collected by Kenya Power and paid to power producers who use diesel to generate electricity. 

EPRA has further increased cost of electricity in Kenyan households has been increasing over the past month, the first increase since January 2024. The increase in the bills and the reduction of electricity tokens has been occasioned by an increase in the fuel energy charge - a key component in a household’s electricity bill. 

At the same time, the Foreign Exchange Rate Fluctuation Adjustment (Ferfa) rose to Sh1.76 per unit from 97 cents in May. This adjustment covers the cost of servicing foreign currency loans to finance power generation. Higher foreign exchange costs indicate increased payments to power producers during the month.

The price will put additional pressure on the cost of living, despite a decline in fuel inflation during May, which had resulted from lower pump prices and a trajectory where the cost of electricity had been marginally decreasing. 

It comes at a time when inflation has also increased. According to the Kenya National Bureau of Statistics (KNBS), inflation rose in May for the first time since January, averaging 5.1 percent compared to five percent in April.

Read Also: Epra Moves to End Kenya Power Monopoly

CEOs Plan Job layoffs

The development comes as a new report by the Central Bank of Kenya shows that employers foresee a situation where they will be laying off thousands of employees in the coming months.  The hardest hit sector in the non-banking sector - particularly in the manufacturing industry. 

According to the CBK survey done last month, responses from CEOs and senior staff of 215 companies, showed that 18 percent of employees from last year "definitely won't" be kept in 2024.

Executives in the non-banking sector have raised their planned job cuts due to declining business performance and the need for cost-cutting. Non-bank companies said they need to be more efficient and reduce costs, which is why they won't be hiring in 2024.

They expressed concerns about industry declines due to a challenging business environment. The manufacturing sector was particularly concerned by the possible enactment of the Finance Bill 2024 as a major challenge to their business operations. 

Read Also: KNBS 2024 Survey Reveals Sectors With Highest Employment Rates

Directline Ceases Operations

Directline Assurance, a major player in Kenya's motor commercial Public Service Vehicle insurance market, has ceased operations.

Royal Credit, the company that owns Directline, announced that the insurance company would no longer be providing coverage and all its employees have been laid off effectively.  

Royal Credit Chairman SK Macharia stated that the decision was a result of the closure of all Directline bank accounts by the Insurance Regulatory Authority (IRA) 

He accused the Insurance Regulatory Authority (IRA) of failing to act against the directors of Directline, who he claims misused Ksh7 billion of the company's funds.

Read Also: Are You Paying Too Much for Car Insurance?