Global oil price drop brings relief for electricity consumers in Somalia

Admin · January 25, 2015

Global oil price drop brings relief for electricity consumers in SomaliaBy Abdirahman Hussein MOGADISHU (Xinhua) -- With a broad smile suggestive of a better business day, Halima Hassan serves a client ice cream in a side shop in Somalia’s capital Mogadishu a week after the electricity firm dropped electricity prices by 21 percent.“I was so elated when I got the message on my phone, saying that I would be paying 0.79 U.S. dollar per kilowatt of electricity compared with the previous 1.1 dollars. I can now make ice creams and also reduce the price for my clients,” Hassan told Xinhua on Wednesday.The reduction in electricity prices is attributed to the falling global oil prices, which now stands at around 50 dollars per barrel.Electricity generation and distribution in Somalia is fully run by the private sector after the collapse of government in 1991.Banadir Electricity Company (BECO), the only electricity generating and distribution company in Mogadishu, produces electricity using diesel powered generators since Somalia does not have hydro or wind powered electricity.Mohamed, a manager at BECO, told Xinhua that they buy the fuel at 125 dollars per barrel, which is a significant reduction from the previous 227 dollars per barrel.“The reduction in global oil prices has motivated us to reduce the charges for our clients,” he said.“I now pay 27.6 dollars for 35 kilowatts,” said Fatima Nor, a client of BECO, adding that the reduction in prices has helped her cut expenditure in her family.Asiyo Jimale, a mother of six, said her children can now study, thanks to reconnection in her house after she stopped using electricity because the price was expensive for her.“I now pay less than 5 dollars a month and my children are able to carry on with their studies in the evening,” Jimale said.However, some people in the city have decided to use solar panels for electricity despite the decrease in prices, saying that electricity cost is still very high in Mogadishu.Hassan Mohamud is one of a few people who use solar in their homes.“I have enough electricity from the solar installation, 24 hours a day, at my home and my business center, which can be used for more than three months,” Mohamud said.Some business in the city closed as they could not meet the electricity expenses.Hussein Farah, a former bar owner in Bakara market in Mogadishu said high electricity cost was the main obstacle to small business growth in Mogadishu.“Using over 25 kilowatts daily in my bar has led to the shut- down of my business because I sometimes could not afford the electricity bill. I could not earn over 25 dollars per day from the business yet the electricity alone consumed that amount,” said Farah.Source: http://www.coastweek.com