Deputy Minister for Energy and Petroleum, John Jinapor, says if the managers of the energy sector could reduce loses due to tariff inefficiencies by only 10%, the country could be making an annual saving of over GH¢200 million (or $100 million).
The deputy minister was reacting to contents of a recent World Bank report on Ghana’s energy sector titled “Energising Economic Growth in Ghana” which among other things, pointed out key challenges in the country’s power and petroleum sub-sectors.
A key point in the report was that, aside the fact that Ghana’s current energy tariff policies are not financially sustainable, the tariffs system in itself is riddled with major inefficiencies, resulting in huge losses for the state.
Speaking on Joy FM’s Super Morning Show on Monday July 8, the deputy minister said he agrees with the World Bank on challenges with the country’s tariff system and noted that huge savings could be made if they were prevented, even minimally.
The report also noted that revenues collected by energy providers are not adequate, resulting in them struggling with state subsidies.
The deputy minister indicated that there is the need for an automated tariff adjustment system to replace the current practice of large sum increments in energy tariffs.
He also charged the energy providers to come up with innovative ideas to save energy, instead of piling up tariff burdens on the consumer.
The deputy minister however, disagreed with the report that board members of state-owned energy enterprises and oversight entities, such as the Public Utilities Regulatory Commission (PURC) are under-performing.
According to him, that point was misplaced because boards must not be composed of technocrats as the report suggested.
The deputy minister explained further, boards carry out the broad policy frameworks for the overall management of the sector.
Although the report also suggested the closure of the Volta Aluminium Company Ltd (VALCO) because it is a drain on the sector, the deputy minister disagreed.
