PURC Announces 14.75% Increase in Electricity Tariffs and 4.02% in Water Tariffs
The Public Utilities Regulatory Commission (PURC) has announced an increase in utility tariffs, with electricity tariffs increasing by an average of 14.75% and water tariffs by 4.02%.
Effective Date and Review Process
The revised tariffs will kick in on May 3, 2025. The change is following the PURC's quarterly tariff review, which considers the exchange rate of the US dollar to the Ghana cedi, inflation projections, fuel costs (particularly natural gas), and the current hydro-thermal generation mix.
Rationale Behind the Adjustment
There were some significant factors that the PURC noted necessitated the tariff changes:
Exchange Rate Volatility: The depreciation of the Ghana cedi against the US dollar has increased the cost of importing fuel and other inputs needed for the delivery of utility services.
Inflation: Rising inflation rates have escalated the operational cost of utilities.
Fuel Prices: Increases in the price of natural gas, a key fuel for generation, have resulted in higher production costs.
Generation Mix: The changes in the hydro-thermal generation mix have impacted the overall power generation cost structure.
Further, due to the need to recover 50% of previous revenue—amounting to GHS976 million—from earlier quarters in 2024, as indicated by the PURC, this repayment obligation was a significant factor in the upward adjustment. To mitigate the effect on consumers, the other 50% is to be spread over the subsequent quarters in 2025.
Impact on Consumers
The adjustments in tariffs will impact different groups of consumers differently. Residential consumers may experience increased monthly bills, whereas industrial and commercial consumers may pay more for their operational activities. The PURC reiterated its resolve to balance the financial health of utility providers and the economic well-being of consumers.
Responses of Stakeholders
Consumer bodies have expressed fears of the potential austerity on home budgets and business operations. They urge the PURC to put in place structures for transparency and efficiency in utility service delivery. Utility providers, however, have welcomed the adjustments, stating that they require adequate revenue to maintain and expand infrastructure.
Conclusion
PURC's tariff adjustments are ongoing efforts at aligning utility prices with economic realities and operating costs. Even as these tariffs are designed to ensure the sustainability of utility services, they point to the requirement for relentless dialogue among stakeholders in addressing Ghana's utility sector challenges.
blogpay
PURC Announces 14.75% Increase in Electricity Tariffs and 4.02% in Water Tariffs
Total Comments: 0