Current crude, gas prices don’t support proposed increase in electricity tariffs – CUTS International

Research and public policy think tank, CUTS International, says a review of the prices of some key inputs for the generation of power, such as crude oil and gas on the international market, does not support the proposed upward adjustment in electricity tariffs.

Already, the PURC has begun engagement with stakeholders to solicit their inputs into a possible review of electricity tariffs, with the Electricity Company of Ghana (ECG) justifying the proposed increment, saying it will aid its operational activities.

Some policy think tanks have kicked against the move, saying this will be a further strain on the incomes of Ghanaians.

The African Centre for Energy Policy (ACEP), for instance, wants to be sure a tariff increment is the best option for the power distributor given its complaints about finances.

Also, the Consumer Protection Agency believes any possible increment in electricity tariffs in the current climate would be ill-timed.

In an interview with Citi Business News, the West Africa Regional Director for CUTS Accra, Appiah Kusi Adomako said an upward adjustment is not necessary at the moment, considering the current price of crude oil and gas.

“Crude oil prices and gas prices have not gone up that much, so if you’re talking about electricity, then it leaves me with the doubt of the rationale on why these companies are asking for tariff increases at the time when the global prices of these goods have remained stable. I believe that PURC should be able to stand in for consumers and users of electricity and tell them that we’ll not be able to allow this.”

“In the past, whenever the prices of crude oil are going up, these companies could gang up and come around on three occasions always ask for an increase in prices. But now we know that on average, prices of these goods have remained stable,” he said.

In the midst of the recent power supply challenges, the ECG says it needs an increment in its tariffs to aid its operational activities.

The last increment in electricity tariffs was in October 2019. where the Public Utilities Regulatory Commission (PURC) oversaw an increase of about six percent.