Fixing issues around utility tariff adjustment imperative
Last week, Tuesday, the Public Utilities Regulatory Commission (PURC) announced the approval of new tariffs, with electricity set to rise by 9.86 per cent and water by 15.92 per cent across all customer categories.
The adjustment, which takes effect from January 1, next year, was approved after the completion of the major Multi-Year Tariff Review Order (MYTO) process for the 2026–2030 period.
A statement signed by the Executive Secretary of PURC, Dr Shafic Suleman, explained that the commission considered utility investment needs, industrial competitiveness and overall consumer living conditions in undertaking the major review.
The exercise is distinct from the quarterly reviews, which focus solely on operational expenses (OPEX) beyond the control of utility service providers.
The announcement has got the nation talking. The Trades Union Congress (TUC) has condemned the move, describing it as "insensitive" and "unacceptable".
It is asking for the suspension of the newly approved tariffs while demanding that the government and the PURC should as a matter of priority immediately engage as agreed to exhaust the consultative process.
Its contention is that the increases would take effect at the same period the nine per cent increase in the minimum wage and the base pay by the government will also take effect, describing it as “the government’s New Year’s gift to Ghanaians.”
The TUC believes that the impact of these increases will be far-reaching. Businesses will struggle to stay afloat, and households will be forced to make impossible choices between paying utility bills and putting food on the table.
The economy will suffer, and the most vulnerable members of society will bear the brunt of the burden.
The Daily Graphic generally agrees that concerns regarding the tariff increases are legitimate since they bother on the fact that the disposable income of majority of workers are quite low, and therefore the resultant effect of the tariffs increase will push them closer to the poverty zone.
To put this brouhaha into context, conversations around the utility sector have changed much because they have always been about access and affordability.
While both households and industrial consumers have always clamoured for a stable and interrupted supply of both water and electricity, without taking into consideration the economics of switching on the lights and clean, fresh potable water.
Ghana's utility sector has long been plagued by inefficiencies, inadequate infrastructure and poor service delivery.
The recent tariff adjustments are a necessary step towards addressing these challenges and ensuring the financial sustainability of the sector.
The Electricity Company of Ghana (ECG) and the Ghana Water Company Limited (GWCL) require significant investments to upgrade their infrastructure, improve service delivery and meet the increasing demand for energy and water.
The tariff adjustments will provide the necessary revenue to support these investments, ultimately benefiting consumers.
Sometimes the pricing adjustment formula of the tariffs becomes contentious.
The Daily Graphic believes that the government must ensure that the tariff adjustments are implemented in a transparent and equitable manner, with measures in place to protect vulnerable households and businesses.
The PURC must also ensure that utility companies are held accountable for their performance, and that consumers receive value for their money.
The tariff adjustments are not a panacea for the utility sector's problems, but they are a crucial step towards achieving financial sustainability and improving service delivery.
The government must complement these efforts with structural reforms, investments in infrastructure, and measures to address inefficiencies and corruption.
Ultimately, the success of the tariff adjustments will depend on the government's commitment to transparency, accountability and good governance.
If implemented effectively, these adjustments can pave the way for a more efficient, reliable and sustainable utility sector, benefiting all Ghanaians.
While at this, we appeal to PURC and TUC to sit at the table to ensure the successful completion of the consultative process where all the parties will be happy regarding the tariff rates.
