Utility service providers demand 200% increase in tariffs

Utility service providers in the country are demanding an upward adjustment in their tariff, despite assurances given by the President to reduce electricity tariff.

The utility companies, who are currently meeting the Public Utility Regulatory Commission (PURC) in a Joint Consultative forum in Accra, want tariffs increased by about 200 per cent.

Speaking to Citi Business News, Chairman of the Technical Committee of the PURC, Ishmael Egyekumhene, said the situation needs careful assessment as government has already promised a reduction in electricity tariff.


“All of them are asking for significant increases in the tariffs. That even makes our work more difficult because already the Executive [President] has actually gone ahead to announce some tariff reduction. I’m sure you just listened to the NEDCo presentation; the figure they are asking for translates to about 200% increases in what was approved for them in 2015. So all of them are pointing upwards, they are asking for more money, but it’s our responsibility to start interrogating all the cost centres because at the end of the day, they have what they call, revenue requirements which goes into how much money they need to be able to run the systems.”

Mr. Egyekumhene said cost is a major factor in considering the total revenue requirements.

“We are looking critically at the cost right from generation to transmission and distribution. If we are only to base the analysis on exchange rate and inflation, there is every justification for the tariffs to go up,” he added.


President Nana Addo Dankwa Akufo-Addo had on January 15, 2018, announced an average of 14% reduction in electricity tariffs for non-residential users in the country with effect from January 2018.


“From January this year, the non-residential tariff rate, which is the rate which includes all of you here, is being reduced by an average of 14%. For barbers, it is being reduced by 18%; for hairdressers and beauticians, 15.7%, and for tailors, 9.8%,” he added.


Government had earlier recommended to the Public Utilities Regulatory Commission (PURC) to reduce electricity tariffs in the country.


It promised to reduce electricity tariffs by between 13 and 21 per cent for residential consumers and industry respectively.


The PURC’s meeting with stakeholders in the sector was to among other things negotiate and determine a reduction in tariffs for businesses.


Former Chief Executive Officer (CEO) of the Volta River Authority (VRA), Dr. Charles Wereko-Brobby, was one of the people who accused government of trying to usurp the mandate of the Public Utilities Regulatory Commission (PURC), by announcing a reduction in electricity tariffs.


According to him, government could make proposals to the regulatory body about a possible reduction in the tariffs, citing possible changes in the cost of production.

He added however that, the final say on any adjustment of the tariffs should come from the PURC devoid of any pressure from the government.


Source: Citi Business News

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