Ghanaians to Pay More for Water (8.3%), Electricity (29.96%) From February

Utility consumers will start paying more for water and electricity beginning from 1 February 2023 as the Public Utilities and Regulatory Commission has announced new tariffs.

In a statement issued on Monday, 16 January 2023, the PURC said consumers are to pay 29.96 per cent more for power and 8.3 per cent for water.

“The PURC is equally mindful of the current difficult economic circumstances but notes that the potential for outages would be catastrophic for Ghana and has to be avoided”.

The PURC said it, therefore, sought to balance the prevention of extended power outages and their deleterious implications on jobs and livelihoods with “minimising the impact of rate increases on consumers”.

“The Commission, therefore, decided to increase the average end-user tariff for electricity by 29.96% across the board for all consumer groups (Table i). The average end-user tariff for water has also been increased by 8.3% (Table 2). The Commission, however, approved varying rate adjustments including some reductions for selected industrial and commercial consumers as part of the ongoing restructuring of the existing water rate structure”, the statement added.

The PURC said it considered four factors for the hikes: the cedi-dollar rate, the inflation rate, the generation mix and the weighted average cost of natural gas.

“Since the announcement of the major tariff in August 2022, these key variables underlying the rate setting have changed significantly”, the PURC said, explaining: “For example, the weighted average Ghana cedi/dollar exchange rate used for the major tariff review was GHS7.5165 to the US dollar”.

“Since then, we have witnessed the depreciation of life cedi against the US dollar and other major currencies. The projected weighted average Ghana cedi-US dollar exchange rate used in the first quarter 2023 tariff analysis is GHS10.5421/USD”, the Commission added.

The Commission also used a projected inflation rate of 42.63% in its tariff analysis for the first quarter of 2023.

“The combined effect of the cedi/US dollar exchange rate, inflation and WACOG is that the utility companies are significantly under-recovering and require an upward adjustment of their tariffs in order to keep the lights on and water flowing”, the statement added.