Zim mulls tariff hike as electricity becomes 'very big problem'

The electricity situation in Zimbabwe is now dire and has "graduated from being a challenge to a very, very big problem," Energy Minister Fortune Chasi said on Monday.

Speaking at a State of the Industry update hosted by Alpha Media Holdings in Harare, Minister Chasi said water levels at Kariba dam had dropped to 24%, which would see power cuts going on for much longer.

He said his ministry was considering a tariff review, or switching off debtors' power supply.

"The tariff is a problem. We can’t be importing at a huge cost and give it away at a zero point costs," he said.

"We are going to review this. We need tariffs that reflect the cost of producing power," he added.

Industry woes

Minister Chasi's comments come at a time industry players have been hit hard by the massive power cuts.

According to Antony Mandiwanza, chief executive of Zimbabwe Stock Exchange listed dairy beverages producer, Dairibord, his company risks losing perishables due to power cuts.

He said his company had been taken off grid for seven consecutive days and this would hit the company's operations hard.

Players in the telecoms sector have also reported serious disturbances at their operations. Many of the challenges are due to the non-availability of electricity at power base stations.

Record number of sites down

Industry sources say they have since recorded the highest number of sites that are down at any given time due to unavailability of power through load shedding.

"A new record of sites (base stations) that are down was set last week. Most sites are down due to ZESA load shedding and fuel stock out," said a source familiar with developments at one of the country's mobile network operators.

Players in the sector have resorted to the use of expensive diesel to power base stations, but current fuel shortages have meant not all of them can be refueled on time, said the source, adding that one of the NMOs uses 100 000 litres of diesel per month.

Henry Nemaire, chairman of trade committee for the Confederation of Zimbabwe Industries, said the current situation - where exporters are using imported diesel - makes local companies non-competitive.

"With the current power shortage, exporters are using imported diesel to generate power with standby generators. The duty on such diesel makes it non-competitive to export products," he said.

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