Mozambique: Details of the reduction in the price of electricity

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Mozambique: Details of the reduction in the price of electricity

2:42 CAT | 28 May 2020

Minister of Mineral Resources and Energy Ernesto Max Tonela announced in the Assembly of the Republic yesterday a reduction, until December, in the price of electricity, but only for some productive sector customers, those “with installed capacity up to 200 kVa”, and for just over 2,000 customers of Mozambique Electricity (EDM). Most Mozambicans, who pay the domestic and general tariff, will not benefit.

“In order to mitigate the effects of the pandemic on the economy and on the most disadvantaged families,” Minister Tonela said, “the Government has decided to implement measures of relief and incentive for economic activity in general and for the areas most affected by the outbreak in particular. Among these measures are the reduction in the price of electricity covering a 50% reduction in the tariff applicable to consumers in this social category for a period of six months from 1 June next.”

@Verdade learned that only 2,458 Mozambicans benefit from the social electricity tariff – those who consume less than 125 kWh per month, corresponding to the consumption of half a dozen light bulbs and no household appliances.

Questioned by @Verdade, the Minister of Mineral Resources and Energy clarified that no relief will be granted to EDM’s approximately 1.8 million domestic customers or to the approximately 5,000 large, medium and high voltage consumers.

Minister Tonela also announced, on Wednesday (27), “the deferral for a period of six months of the payment of the fixed rate on the electricity bill of companies in the industrial, commercial, agricultural, services, hotels, catering, education, sports facilities and cultural, included in the general tariff, large consumers of low voltage and medium voltage, with installed power of up to 200 kVa whose billing registered a reduction of more than 30 percent due to the effects of the pandemic”.

In addition, there will be “a 10 percent reduction in the energy bill of consumers in the commerce, agriculture, services, hospitality, catering, education, sports and cultural facilities sectors, with power of up to 200 kVa, included in the general tariff of large consumers of low voltage for a period of 6 months from 1 June, whose billing registered a reduction of more than 30 percent due to the effects of the pandemic”.

Productive sector asked for 50 percent discount

Minister Max Tonela explained to @Verdade that the reduced consumption condition comes in response to the fact that not every productive sector is losing money. “ We have this scope in the system taking into account the behaviour (of the customers covered). Imagine a detergent factory. At this time it is doing good business,” he explained, going on to clarify that the discount process did not depend on the submission of company accounts.

Businesspeople in the industrial sector had asked for a 50 percent reduction in the electricity rate for a period of six months, the Confederation of Business Associations noting that electricity represents 12 percent of the fixed costs of a business structure with monthly overheads of around five million meticais.
“For industries, electricity is a fundamental part of their production process, and at a time when energy prices are higher than in many of their southern African counterparts. Electricity has seen substantial price increases in the last two years, and we think it is very important to support the work of the industries, so that they can continue to function and maintain their jobs. It is very important that the energy bill is reduced, and therefore what we propose is, for the industries in particular considered, a reduction in the energy bill during this period, in which we are labouring under this common difficulty,” Fernando Oliveira, CEO of Sumol/Compal Mozambique explained to journalists on 7 May.

By Adérito Caldeira

Source: A Verdade