The Public Utilities Regulatory Commission (PURC) has announced an 18.36% increase in electricity and natural gas tariffs for all consumer groups following its review of the second quarter of 2023.
This decision was made in order to prevent prolonged power outages and the associated negative impacts on employment and livelihoods, while also trying to minimize the effect of the rate hike on customers.
The Quarterly Tariff Review Mechanism was employed to take into account the changes in the key factors used to determine electricity and natural gas rates.
The PURC has attributed the recent increase in utility prices to the Ghana Cedis/US Dollar exchange rate, inflation, electricity generation mix, and the Weighted Average Cost of Natural Gas (WACOG).
“This review has become necessary to maintain the real value of the cost of supply of the utility services and to ensure that the utility companies do not under or over-recover costs.”
This was revealed in a statement signed by the Commission’s Executive Secretary, Ishmael Ackah.
“While under-recovery has negative implications for the ability of the companies to supply service to consumers, and has the potential of causing outages of electricity, over-recovery unnecessarily overburdens consumers of electricity.”
To ensure that utility companies are neither under- or over-recovering their costs, the PURC believes that a review of prices is necessary.
They state that under-recovery has the potential to lead to electricity outages, while over-recovery would be an undue burden on electricity consumers.