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`Poor clients denied electricity subsidies`

19th June 2012
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Deputy Minister for Energy and Minerals, George Simbachawene

The government has refused to give electricity subsidies to ordinary people in Kagera region to enable them access power and reduce costs of living, the Parliament was told yesterday.

Responding to a question by Conchesta Rwamlaza, Special Seats Member of Parliament (Chadema) who had wanted the government to introduce power subsidies, the Deputy Minister for Energy and Minerals, George Simbachawene, said for now that wouldn’t be granted by the government.

He told the House that Tanzania has been purchasing power from different sources at a very high cost compared to other East African countries, therefore granting such relief wasn’t possible.

Simbachawene said one unit of electricity in the country was being sold at 144/-, in Kenya at 192/- and in Uganda 240/-.

The Deputy Minister said in 1993, the Tanzania Electric Supply Company (Tanesco) entered into an electricity selling contract with the Uganda Electric Board in which a prices of USD 8 cents per unit was agreed.

He informed the House that between August 2004 and March 2009 the price went down to USD 6.5 cents per unit, but since 2009, the average price of unit of electricity has been increasing quarterly.

He said the increase was due to long time drought which compelled the Ugandan power company to use fuel in generating power, instead of water. Ugandan power regulator ordered the company to hike the price for its customers, including Tanesco.

Simbachawene said in 2009, the average selling price of electricity from Uganda was USD 9.6 cents per unit, equivalent to 128/-, while Tanesco was selling the same unit to Kagera customers at 112/- per unit.

He said in 2010, the average buying price of electricity from Uganda shoot up to USD cents 13.8 cents per unit, equivalent to 200/- per unit, while Tanesco was selling the same unit at 112/- only.

Simbachawene said last year, the average buying price of electricity from Uganda went up to USD cents 15.9 per unit, equivalent to 253/-, while Tanesco was selling the same unit at 141/-.

He said in this year the buying price in unit of electricity decreased to USD 12.3 cents per unit, equivalent to 199/-, and Tanesco was selling the same unit at USD 12.24 cents, equivalent to 198/- .

The trend shows that for the past four years Tanesco has been purchasing power from Uganda at a higher price and selling to its Kagera customers at a lower price, therefore, he said suggesting subsidies would increase the burden on the part of the government and Tanesco.

However, he promised that the government, through his office, would work on the suggestion to study it and give a responsible as soon as practical. 

SOURCE: THE GUARDIAN
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