The Public Utilities Regulatory Commission of Ghana (PURC) has announced a new tariff adjustment for electricity and water services, effective October 1, 2024. This decision follows a quarterly review under the PURC Quarterly Tariff Review Framework, which aims to align tariffs with changes in key economic factors.
Electricity tariffs will increase by 3.02%, while water tariffs will rise by 1.86%. The Commission’s analysis considered several economic indicators, including the US Dollar/Ghana Cedi exchange rate, domestic inflation rate, and the Weighted Average Cost of Gas (WACOG), all of which significantly impact the costs of electricity generation and water supply.
In its statement, the PURC emphasized the importance of maintaining the real value of tariffs to ensure the financial viability of utility service providers. This adjustment is crucial for sustaining the operations of the Electricity Company of Ghana (ECG), Ghana Water Limited (GWL), and Northern Electricity Distribution Company (NEDCo). The Commission aims to reduce the fiscal burden on the government, which has been subsidizing the regulated electricity and natural gas sectors.
The approved increases are expected to generate an additional GHS 2,024.5 million in revenue for ECG, GHS 243.20 million for NEDCo, and GHS 227.40 million for GWL over the third quarter. The PURC has urged these utilities to adhere to a strict revenue collection benchmark of 98% to ensure that all stakeholders in the value chain receive due payments.
While recognizing the potential impact on consumers, the Commission has committed to considering the current economic conditions and living standards in Ghana. The adjustments aim to strike a balance between ensuring cost recovery for utility services and maintaining the sustainability of essential public services.
