Prime News Ghana

Increased tariffs : Manufacturers to pass on cost to consumers

By Justice Kofi Bimpeh
Electricity in Ghana
Electricity in Ghana

Ghana National Chamber of Commerce and Industry says manufacturers will be forced to transfer to Ghanaians, the cost associated with the recent increase in electricity and water tariffs announced by the Public Utilities Regulatory Commission (PURC).

The Utility Services Regulator recently approved an 11.17 percent tariff increment for electricity and 8.1 percent increment for water, all of which took effect from yesterday.

Speaking to Citi FM on the impact of the recent tariff increment, the CEO at the Ghana National Chamber of Commerce and Industry, Mark Badu-Aboagye said companies will in the short-term absorb the cost but will later pass it on to consumers.

“In the meantime businesses cannot increase their prices to accommodate for the recent increase in tariffs. In the long-term the likelihood is that a portion of this increment will be passed on to consumers, otherwise these businesses will collapse. And this is something we have to critically consider,” he cautioned.

Tariff increment

The Public Utilities Regulatory Commission (PURC) has approved an 8.01 percent increment in water tariff, and 11.7 percent for electricity.

At a press conference, the Executive Secretary of the Commission, Maame Dufie Ofori, highlighted the factors that have necessitated an increment in these tariffs including the dollar to cedi rate, projected inflation rate and increasing electricity and water demands.

"In arriving at this decision the PURC took into consideration several issues key among them are the following; the ECG PSP process, projected inflation rate, Ghana-US dollar exchange rate, cost of operation of utility companies and projected electricity and water demand for the 2019/2020 tariff period, as mandated by law and in compliance with the commission's tariff decision making process, extensive stakeholder consultations were held to solicit views and gather inputs for the final determination of the tariffs."

The PURC approved the increase after considering proposals from the Volta River Authority (VRA), the Ghana Grid Company Limited (GRIDCo), the Electricity Company of Ghana (ECG), Power Distribution Services (PDS) Ghana Limited, the Northern Distribution Company (NEDCo) and Enclave Power Company Limited (EPC).