Business News of 2013-12-24

2014 utility tariffs: We are back to square one - GMA fumes

The Ghana Medical Association (GMA) is accusing the Public Utilities Regulatory Commission (PURC) of bad faith in the wake of the latest increases in utility tariffs. But the PURC has rejected the criticism.

General Secretary of the Association Frank Serebour, says for utilities to be increased after it was slashed weeks ago means Ghanaians are back to square one. The PURC yesterday announced that from 1st January 2014, electricity tariff will go up by 9.73 per cent while that of water will increase by 6.80 per cent. The increases have been determined based on the Automatic Adjustment Formula.

In a statement the PURC says the adjustments are largely driven by movements in the exchange rates, inflation and the demand variation.

Government had announced in November, a reduction in electricity tariff by 25 percent. This meant consumers now pay 59.18 percent as against the 78.9 per cent announced by the Public Utilities Regulatory Commission (PURC).

But with the latest increase by nearly 10%, the Ghana Medical Association says "we are just left with about 15% to get back to the original level...basically we are back to square one".

The PURC has expressed surprise at the position taken by the labour union. Communications Director at the Commission, Nana Yaa Gyantua says they have only implemented organised labour’s request for a thorough application of the automatic adjustment formula.

During a stand-off between labour and PURC last October over a 78% increase, labour argued that the Commission adopt an automatic adjustment formula which was expected to see marginal increases in tariffs. They accused PURC of bowing to political pressure by holding on to adjustments only for huge increases to be announced at politically convenient times.

All stakeholders said that we should go to full implementation of the automatic adjustment formula. And this is what we have done" she said. The automatic adjustment formula, she says is to be done every quarter and warns of a distortion if it is not strictly adhered to.