Manufacturers are likely to transfer to Ghanaians, the cost associated with the recent increase in electricity and water tariffs announced by the Public Utilities Regulatory Commission (PURC).
That’s according to the Ghana National Chamber of Commerce and Industry (GNCCI).
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.
Commenting 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.
Justification for increase in water tariff
The Executive Secretary of the Public Utilities Regulatory Commission (PURC) Maame Dufie Ofori, at a press conference 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.
Electricity Cost and cost of the chemicals for water treatment were also cited as reasons for the tariff increase
This increment follows the increase in electricity tariffs by 11.17 percent, effective July 1, 2019.
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).
Tariff proposals for water also came from these stakeholders.
“In line with the commission’s regulatory oversight mandate, extensive technical and financial analysis of the proposals were undertaken,” Mrs. Ofori said.
“The key objective of the tariff review was to sustain the financial viability of the utility service providers as well as ensuring the delivery of quality service to consumers,” she explained.
The last major tariff change water came in September 2018 when the PURC has ordered a 10.08 percent tariff reduction on prevailing rates for all customers of the Ghana Water Company Limited (GWCL).