Ghana’s Public Utilities Regulatory Commission (PURC) has announced an 8.01 per cent increase in water tariff.
This followed an 11.17 per cent hike in electricity tariff last week after frantic calls by the Chairman of Independent Power Producers, Distributors and Bulk Power Consumers, Kwame Pianim for government to consider increasing utility tariffs by 30 per cent, warning that the economy would suffer should the government continue to subsidise utility tariffs.
Addressing journalists in Accra on Monday 24 June 2019, Chairman of the Technical Committee of the PURC, Ishmael Agyekumhene said the hikes were necessitated by the recent tumbling of the Cedi against the dollar and increase in the inflation rate.
“When we were determining the 2018 tariffs the exchange rate that was used at the time was 4.43 Ghana cedi to the US dollars. In this tariffs revenue, the average exchange rate that we used is 5.05,” Mr Agyekumhene said.
He added: “The rate of inflation has also gone up and the price build up for electricity tariff…you have the forex component, you have the cedi component. For the forex, you need to adjust when the exchange rate is low otherwise there will be under recovery and same for the inflation.
“So, if you look at these two that alone is enough if nothing else happens to justify the increase that has been announced. We simply couldn’t have kept the tariffs where they are.”
He said the fact that tariffs were reduced by the government in an effort to keep its electioneering promise “didn’t mean that tariffs were never going to be increased again.”
He said: “In so far as the exchange rate plays a role in this tariff determination, tariffs, unfortunately, will have to go up.”
Executive secretary of the PURC, Mami Dufie Ofori, added the increase would go a long way to stop under-recovery of revenues and that it was “the outcome of prudent cost review and effective monitoring undertaken by the commission.”
“It is therefore expected that the utilities will be able to cover their administrative, operations and maintenance cost resulting in the provisions of quality utility services to consumers,” she said
Source: Daily Mail GH