How Kenyans coped with high living costs, rising energy prices

When Azimio la Umoja supporters took to the streets with empty sufurias in protest over the high cost of living on March 30, 2023. [Denish Ochieng, Standard]

Kenyans reduced their consumption of petroleum products as they coped with the higher cost of fuel while defaulting on payment of their electricity bills. This is as the cost of electricity also inched upward last year, even as power consumption increased.

In the case of fuel, last year was the second consecutive year that consumption has dropped as prices stayed up.

Consumption of diesel, a key fuel for industries - particularly transport, agriculture and manufacturing, dropped to 2.26 million metric tonnes in 2023 compared to 2.27 million tonnes in 2022.

Though the drop is marginal at 0.28 per cent, it is a pointer to the reaction of different industries to the tough economic environment, with high fuel prices being among the issues they have been grappling with. 

It was the same for super petrol, whose consumption dropped 3.3 per cent to 1.46 million tonnes last year from 1.51 tonnes in 2022.

 Petrol prices retailed at a historical high of Sh217.36 a litre in Nairobi, last October.

Biggest drop

Kerosene registered the biggest drop of 38.8 per cent last year, an indication that the cost of the fuel that is mostly used by the poor for lighting and cooking has gone beyond their reach. The retail cost of fuel peaked in October last year at Sh205.06 a litre in Nairobi.

While the government has been campaigning to reduce the use of kerosene due to its effects on human health and the environment, there have been fears in the past that the high cost of kerosene is driving households to use even dirtier fuels such as charcoal and firewood.

While the Energy and Petroleum Regulatory Authority increased electricity prices in April last year, Kenyans defied the high cost and instead increased their power consumption during the period.

The country consumed 10.3 billion units of electricity last year up from 10 billion units in 2022. 

KenGen recently reported that the national electricity demand continued its upward trajectory, peaking at 2,170.56MW (megawatts) on December 19, 2023, as consumption grew. The peak demand in December 2022 was at 2,149MW.

The impact of the high cost of fuel might however be felt when it comes to paying with Kenya Power reporting that there has been an increase in the amount owed to the firm by consumers in its latest annual report. Kenyans owed the firm Sh35.7 billion for electricity consumed over the year to June 2023.

This was an increase from Sh27.3 billion, which Kenya Power noted was due to a mix of factors including the tough economic times as well as the high cost of electricity that followed a new tariff that came into effect on April 1.

Kenya Power in its annual report said Sh15.89 billion of the money that customers owed over the year to June 2023 was more than three months old. Another Sh3.66 billion remained unpaid for between 30 and 90 days while Sh16.14 billion was due for less than 30 days.

“Electricity debt increased from Sh27.3 billion to Sh35.69 billion, mainly due to an increase in the level of monthly billing from an average of Sh13. billion in the first quarter of the year to Sh18.61 billion in the fourth quarter,” said Kenya Power in its annual report.

“The increase was due to the combined effect of the depreciation of the local currency, high fuel processes and the revised tariffs.”