The Public Utilities Regulatory Commission (PURC) has announced an increase of 18.36 per cent in electricity and natural gas tariffs for all consumer groups for the second quarter starting June 1.
In a press statement released and signed by the Executive Secretary of the Public Utilities Regulatory Commission, Ishmael Ackah, said the increase has become necessary to maintain the real value of cost of supply of the utility services to prevent the negative implications of under recovery which has the potential of causing power outages.
'This review has become necessary to maintain the real value of cost of supply of the utility services and to ensure that the utility companies do not under or over recover costs
The Commission therefore decided, after extensive deliberations and analysis, to increase the average end-user tariff for electricity by 18.36% across board for all customer groups,' it stated.
According to the Commission, since the announcement of the first quarter tariff decision in January 2023, the key variables underlying the rate setting have changed adding that the weighted average Ghana Cedi to US Dollar exchange rate used for the first quarter tariff review which was GHS10.5421 to the US Dollar has changed as result of the depreciation of the cedi against the US Dollor.
'The net effect of the Ghana Cedi/US Dollar exchange rate, inflation, WACOG and electricity generation mix is that the utility companies are under-recovering and require an upward adjustment of their rates in order to keep the lights on. The first quarter tariff decision resulted in a 25 per cent under-recovery of the exchange rate.
The Commission also stated that though it is mindful of the current economic challenges, failure by the Commission to increase these tariffs has the potential for high power outages and have a strong impact on citizens and businesses.
'This has to be avoided. The PURC therefore sought to balance prevention of extended power outages and its adverse implications on jobs and livelihoods, while minimizing the impact of rate increases on consumers. The Commission will continue to monitor quality of service to ensure consumers get value for money,' it added.