Ghanaians to pay more for electricity and water effective July 1

Effective July 1, 2024, household and industrial consumers will be paying more for utility tariffs for electricity and water, following a second-quarter upward review under the Quarterly Tariff Review Mechanism.

The sector regulator, the Public Utilities Regulatory Commission (PURC), has announced a 3.45% increase in electricity tariffs for lifeline consumers (0-30kWh).

An increase of 5.84% will be incurred by all other residential electricity consumers who are not part of the lifeline category bracket (31 kWh and above), as well as the non-residential category.

For those in the industrial category, the Commission has sanctioned a 4.92% increase for electricity consumers, effective July 1, 2024.

On the other hand, water tariffs will experience an increase of 5.16% for all customer classes for the period under review, PURC stated in the quarterly review.

The changes are to last from July 01, 2024, to September 30, 2024, PURC indicated in the second-quarter tariff announcement.

"These reviews are undertaken to maintain the real value of the tariffs, thereby keeping the utility service providers financially viable to enable them to deliver their services to consumers," the Commission stated.

The Commission explained that the decision to increase electricity and water tariffs for the period under review tracked and incorporated movements in key uncontrollable factors.

The factors were the exchange rate between the US Dollar and the Ghana Cedi, the domestic inflation rate, the electricity generation mix, and the cost of fuel, mainly natural gas.

The Commission said it also considered the competitiveness of industries and the general living conditions of Ghanaians before arriving at the new increment in tariffs.

The sector regulator stated that during the period under review, there was no change in the generation mix between hydro and thermal.

The weighted average cost of gas (WACOG) increased by 5.23%, moving up from USD 7.6426/MMBtu to USD 8.0422/MMBtu.

However, the Cedi depreciated against the Dollar by 20.80% between the first and second quarters of the year, moving from GHS 12.1349 in the first quarter to GHS 14.6584 in the second quarter.

Inflation eased marginally from 28.27% in the first quarter to 24.38% in the second quarter of 2024, the Commission observed.

During the first-quarter review, there was no change in electricity tariff for lifeline consumers, an average reduction of 6.56% for consumers within the consumption bracket of 301kWh and above.

However, those who consumed more than 301kWh had an average reduction of 4.98%.

The water tariff for the first quarter of 2024 remained at 0.34%, the same as for the fourth quarter of 2023.