Adjustment in electricity tariffs to reduce energy sector shortfall - IMF

The International Monetary Fund (IMF) has stated that the increase in electricity and other utility tariffs aims to reduce the shortfall in the energy sector.

The Bretton Woods institution further explained that the tariff adjustment is intended to put an end to the accumulation of new arrears.

In a publication on their website, as cited by GhanaWeb Business, the IMF noted that; “On the latter, the resumption of quarterly electricity tariff adjustments, combined with structural reforms, will help reduce the energy sector shortfall and stop the accumulation of new arrears," the IMF stated.

The IMF’s comment comes after the Public Utilities Regulatory Commission (PURC) announced an upward adjustment in the average end-user tariff for electricity by 14.75%, and a 4.02% increase in water tariffs across the board for all categories of consumers.

According to PURC, the adjustment, which takes effect on May 3, 2025, is in line with its quarterly tariff review mechanism, as outlined in its rate-setting guidelines for the periodic adjustment of natural gas, electricity, and water tariffs.

The Commission noted that the adjustments were driven by factors such as the exchange rate, inflation, electricity generation mix, and the cost of fuel (mainly natural gas) used in the production of electricity.

The move, the Commission explained, is intended to avoid both over-recovery and under-recovery of revenues.

In July last year, the Commission increased utility tariffs, raising electricity by 4.22% and water by 1.18%.

SA/MA

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