By Gloria Amoh
The Public Utilities Regulatory Commission (PURC) has announced a review of electricity and water tariffs, effective from July 1, 2024, to September 30, 2024.
These adjustments are part of the Commission’s Quarterly Tariffs Review Mechanism, which factors in key uncontrollable elements such as the exchange rate between the US dollar and the Ghana cedi, domestic inflation rates, the electricity generation mix, and fuel costs, primarily natural gas.
The purpose of these reviews is to maintain the real value of tariffs, ensuring the financial viability of utility service providers and enabling them to continue delivering essential services to consumers.
In addition to these economic factors, the Commission also considered the competitiveness of industries and the general living conditions of Ghanaians in making its decision.
For the upcoming quarter, the PURC has announced the following tariff increases:
- A 3.45% increase in electricity tariffs for lifeline consumers (those using 0-30 kWh).
- A 5.84% increase for all other residential consumers using more than 31 kWh, as well as non-residential consumers.
- A 5.16% increase for all classes within the industrial category.
The total revenue requirement for the electricity sector in the first quarter of 2024 was GHS 5.67 billion.
This figure is projected to rise to GHS 6.81 billion in the second quarter, representing an increase of GHS 1.14 billion. However, the Commission has decided to recover GHS 5.90 billion of this amount in the second quarter, citing the need to balance revenue collection performance with the financial burden on consumers. The remaining GHS 906.21 million will be recovered in subsequent quarters.
Additionally, with the water sector, the total revenue requirement for the first quarter of 2024 was GHS 635.86 million, with an increase to GHS 670.18 million projected for the second quarter. This represents an additional GHS 34.33 million needed for recovery, leading to a 5.16% increase in water tariffs.
The PURC says its decision ”reflects a careful consideration of both the financial sustainability of utility providers and the economic impact on consumers, aiming to ensure the continuous provision of essential services while mitigating the burden on the public”.