Government must come clear on tariff cut – ACEP

Policy Think Tank, the African Centre for Energy (ACEP) has asked government to expatiate issues relating to the reduction of electricity to clear any ambiguity.

Reading the 2018 budget, the finance minister, Mr. Ken Ofori-Atta announced that government will be reducing electricity tariff between 13 to 21 percent beginning next year.

‘’Mr. Speaker, during the 2016 election campaign, H.E. the President, Nana Addo Dankwa Akufo-Addo, promised Ghanaians that with prudent management of the economy, the NPP government would ensure that electricity tariffs are reduced. In fulfillment of this promise, government has reviewed the tariff setting methodology and cost structure of power production. This review has resulted in recommendations that will be made to the PURC for consideration.’’ He noted.

The reductions in electricity tariff as contained in the 2018 budget are; Residential – Up to 13%, Nonresidential – 13%, Special Load Tariff-Low Voltage – 13% ,Special Load Tariff -Medium Voltage – 11%, Special Load Tariff -High Voltage – 14%, High Voltage Mines – 21%.

The new tariff cuts are however subject to approval by the Public Utility Regulatory Commission (PURC)

But speaking to Accra based Citi FM the Executive Director of ACEP, Benjamin Boakye has asked government to clarify the details that informed the proposed reduction in the electricity tariffs.

“Tariffs in Ghana are extremely high and ought to come down, but the fundamentals will have to be checked to ensure that we are not going to put the institutions in distress. We know that the losses are high so you have to put some mechanisms in place to reduce the losses so we can pass on the relief to consumers.

We haven’t seen that happen immediately and so we don’t know how that reduction is going to come about. It will be good to see what is informing reduction at this point.

If it’s out of some negotiations they have had with the generators to cut down some cost and therefore, they are able to pass on that relief to consumers, that will be good news.

But we now know the numbers of the quantum of reduction that is going to come but we don’t know how that reduction is coming about. And that is what is important for Analysts like us so that we can interrogate the numbers and project where the implications are on the sector.”