PURC Justifies 18.36 Percent Increase In Electricity Tariff

The Public Utility Regulatory Commission (PURC) has given insights into factors that it considered in the approval of the recent 18.3 percent electricity tariff increase. According to the commission, the tariff was supposed to be increased by 27.5% to cover some GH¢1.3 billion that the Electricity Company of Ghana (ECG) ought to have recovered.

The decision to increase it by 18.36 percent, according to the Commission, means there is an outstanding GH¢427 million, which Ghanaians will be made to pay in the next tariff adjustment. The utility regulator also disclosed that an increase in the next adjustment window may be required taking factors such as exchange rates and the availability of natural gas into consideration.

In an interview with the media on the sidelines of a training workshop on the activities of the Commission, the Executive Secretary of the Commission, Dr. Ishmael Ackah assured Ghanaians that the adjustments are only to ensure the viability of utility providers.

The tariff we announced which will take effect on June 1, that tariff is paying for 100 percent of the changes in inflation, 100 percent of the changes in natural gas, and 50 percent of the change in exchange rates. But because the exchange rate contributes to about 60 percent of the quarterly adjustment, that 60 percent alone is about GH¢427 million.

So for next quarter, if the exchange rate comes below what we are using now to the extent that savings can pay for the exchange rate and make ECG stable and actually also pay for the GH¢427 million we are pushing forward, there won’t be any increase but if the exchange rate is to the extent that it is not covering what we are pushing forward, then there will be some increase.