The Public Utilities Regulatory Commission (PURC) today announced a substantial 14.75% increase in the average end-user electricity tariff and a 4.02% rise in water tariffs across all consumer categories for the second quarter of 2025.
The new tariffs are expected to take effect in May 03, 2025.
The decision, comes as a result of the Commission’s quarterly review process, which factors in key economic indicators and outstanding revenue from the previous year.
According to a press release from the PURC, the adjustments are in line with their Quarterly Tariff Review Mechanism, designed to track and incorporate fluctuations in the Cedi/Dollar exchange rate, inflation, electricity generation mix, and the cost of fuel, primarily natural gas.
The Commission emphasized that this mechanism is crucial to prevent both under-recovery and over-recovery of revenue for utility companies.
PURC highlighted that for the second quarter of 2025, a Weighted Average Exchange Rate of GHS15.6974 to the USD was utilized, indicating an under-recovery of Ghs0.1700 from the last quarter of 2024. Additionally, an average three-month projected inflation rate of 22.49% was considered.
The Weighted Average Cost of Gas (WACoG) for the current quarter stands at USD 7.6289/MMBtu, a decrease from the USD 7.8368/MMBtu used in the third quarter of 2024. The projected hydro-thermal generation mix for the second quarter leans heavily towards thermal generation, with 28.80% from hydro sources and 71.20% from thermal sources.
A significant factor contributing to the tariff adjustments is the Commission’s decision to recover half (50%) of an outstanding revenue of Ghs976 million carried over from the previous three quarters of 2024. The remaining 50% is slated to be addressed in subsequent quarters.
The PURC explained that the combined impact of the exchange rate, inflation, and the partial recovery of outstanding revenues has put significant financial strain on utility companies.
“The combined effect of the cedi/dollar exchange rate, inflation and the payment of 50% of outstanding revenues from the previous quarters in 2024, is that the utility companies are bleeding from serious under recovery. For the time value of money, utility companies just like other businesses, will need periodic reviews of their prices (tariffs) in order to remain operational,” the PURC stated in their release.
Despite the potential for a much steeper increase if the full outstanding revenue was recouped, the Commission stressed its consideration of the current economic climate for Ghanaians.
“A total payment of the outstanding revenues from the previous quarters would have resulted in much higher increase in both electricity and water tariffs. The Commission, being mindful of the current economic difficulties for Ghanaians decided to recoup only half of the outstanding debts. This has always been the careful balancing act the Commission has had to do to minimize the impact of tariff increases on livelihoods while ensuring that the utilities are well-capitalised to keep the lights on,” the PURC affirmed.
