Electric infrastructure suppliers demand price revision as inflation drives up costs
Domestic manufacturers supplying Ethiopia’s electrical infrastructure are urging the Ethiopian Electric Utility (EEU) to revise its pricing structure, citing the severe impact of soaring inflation, rising import costs, and currency fluctuations on their operations.
The call for price adjustments was made during a recent consultative forum organized by the EEU, which brought together local manufacturers and suppliers of key electrical components such as transformers, cables, and conductors. Participants voiced growing concern that the current pricing model is unsustainable in the face of escalating production expenses.
“The current inflation in the country has become more severe than we anticipated. The price of our raw materials is increasing at an alarming rate, making the existing pricing approach unsustainable,” one manufacturer stated. Many noted that most inputs are imported, and the combined effect of fluctuating exchange rates and higher transportation costs has significantly raised their production costs.
Another supplier emphasized the need for a comprehensive revision of the EEU’s pricing system, explaining, “When we set the prices for our products, we take into account everything from the cost of raw materials to profit margins and other operational expenses. However, the constant fluctuations in the exchange rate are having a major impact.”
Manufacturers also called for greater transparency and responsiveness from the EEU regarding price adjustments. “The EEU should have a clear assessment and price schedule in place. With the current high inflation affecting the country, their response to these price hikes is slow, which is severely impacting us manufacturers,” a participant asserted.
In response, the Ethiopian Electric Utility stated that it considers all factors related to domestically produced electrical infrastructure inputs, including the cost of raw materials. The utility acknowledged the reliance on imports and affirmed that costs incurred from procurement to delivery are taken into account.
“Our pricing has historically considered domestic production costs, profit margins, and other operational expenses. Price revisions are typically made when significant changes occur, such as fluctuations in fuel prices or currency exchange rates. Our ‘flat rate’ pricing is mostly reviewed annually. We hope to work on this in a clearer manner,” the EEU said.
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