Drop in electricity costs lowers inflation to 7.15pc

A Kenya Power worker inspects a transmission line. A drop in the cost of electricity and communication has pushed down inflation to 7.15 per cent in December. FILE 

By GEOFFREY IRUNGU

A drop in the cost of electricity and communication has pushed down inflation to a four-month low, the bureau of statistics announced on Monday.

Overall inflation dropped to 7.15 per cent in December, during which data from the Kenya National Bureau of Statistics (KNBS) shows there was a small increase in the housing, water, gas and other fuels index compared to the previous month.

“The marginal increase was attributed to notable rises in the cost of cooking fuels. However, a significant fall in the cost of electricity balanced the net effect in the index,” said the KNBS in a press statement.

It added that despite the introduction of a levy of 6.0 cents per KWh electricity costs reduced significantly due to waiving of inflation levy and reduction of forex adjustment costs.

There was also reduction in prices in the communications sector where the December prices were lower by 3.37 per cent compared to 2012.

Prices jumped by 8.29 per cent in September after the government enacted the Valued Added Tax Act 2013.