Tuesday, July 14, 2015

Tanzania to be affected by power rationing by February 2016, says an expert

Tanzania has been predicted to be experiencing serious power rationing crisis which is likely to occur between December this year and February next year, a technical expert in power generation unit at the Tanzania Electric Supply Company (TANESCO) has said. The source who spoke on strict condition of anonymity said on Thursday this week in Dar es Salaam that, there has been constant increase of the operational costs at the TANESCO due to the constant falling of the Tanzanian shilling which has occurred 5 months ago. According to the source, TANESCO has been trading at loss ever since it lowered down its tariffs in February this year as it hoped to see the price quotations of fuel at the global market remains constant as the lowering of the tariff was exacerbated by the drastic fall of oil price at a global market. Since the company has been depending largely on hydro electricity power generation, it has been spending a lot of money to buy diesel and oil lubricants which are required to run the machines in its various designated hydro-power generating stations in the country. The source further has noted that, since the decline of fuel price at a global market was announced, the firm was forced by the government to reduce its power tariffs by 2.21 per cent. For customers who consume more than 75 units a month with effect from March this year. However, the source could not identify how much loss has been incurred by the company but noted that the situation has been worsened by last week’s fuel price increase at a local market which was announced by Water Utility Regulatory Authority (EWURA). The indicative fuel prices doubled up to 95 percent from Sh. 1,270/- to currently Sh. 2.340/- per liter of a diesel. Sources maintained that, despite of such a price fluctuations, the firm’s tariffs have remained constant and moreover it has been operating at a newly introduced cost rates without increasing electricity tariff charges which could compensate the impending losses. Due to the prevailing situation, TANESCO will not survive and make good profit at the expense of what it incurs now, and moreover incase it reverts to old tariffs, the people are likely to cause a public outcry. Following such a situation, sources have noted that the firm has resort to operate at a loss which would be compensated later by the new government under another President as the firm would entirely be compensating such losses an aspect that would cause power rationing as other expenses would be cut off. Commenting over the matter, TANESCO’s Managing Director Felchesmi Mramba said that, power rationing schemes in the country would be cut off in August next month when gas pipeline project from Mtwara would effectively start to operate from Kinyerezi depot in Dar es Salaam. He refuted claims that TANESCO is operating at a loss due to the constant falling of a shilling, a wave that has caused price increase on products sold by almost all business enterprises in the country. According to him, the gas plant depot will have a capacity to produce over 3,000 MW of the electricity that will be used in heavy industries located at various points in Dar es Salaam city. “People should not get worried about the power rationing any more as the government through TANESCO has put in place enough distribution of the electricity that will cater for both domestic and industrial purposes.

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