According to the Minority in Parliament, the Public Utilities Regulatory Commission’s (PURC) rise in utility rates will only make the high expense of living situation worse.
This follows the PURC’s announcement of new power and water rates.
As of September 1, utility users will pay a combined rate of 27.15 percent for electricity and 21.55 percent for water.
In a news release dated August 15, the ranking member of the parliament’s mines and energy committee, John Jinapor, warned that the tariff increase will simply make the already high cost of living worse.
The rise will also “worsen the position of the already destitute Ghanaian,” according to Mr. Jinapor.
Prior to the increases in the electricity tariff, the price of gasoline at the pump had increased by a whopping 100%.
The Price Stabilization and Recovery Levy has increased by 40% while the Energy Debt Recovery Levy has increased by 20% so far.
“The Unified Petroleum Pricing Formula has been increased by 164%, whilst the BOST margin has been increased from three pesewas to nine pesewas representing a 200% increase. As if this is not enough, the fuel marking margin levy has also been increased by another 233%.
This is against the background that the volume of petroleum products consumed has increased by 35% from 4 billion litres to 5.5 billion litres.”
In this regard, he said, “We are of the greatest view that Government can and must do something to comfort Ghanaians who are suffering from unfathomable sufferings with ever-worsening poverty levels under the Akufo-Addo/Bawumia-led government.”
Mr. Jinapor further stated that not all consumers will be affected by the 27% price hike for electricity.
“A rigorous examination of the tariff structure as it has been released reveals that all residential customers who fall within the 0-300 kWh band have had their prices increase from GHp/kWh 65.4161 to GHp/kWh 89.0422, which represents an increase of over 34%.
The majority of residential consumers fall within the 0-300 kWh range, therefore the 34% modification will have a negative impact on them, he added.
Read full message below:
MINORITY STATEMENT ON RECENT UTILITY TARIFF HIKES.
The Minority in Parliament has taken note of the significant utility tariff hikes for electricity and water in an announcement by the Public Utilities Regulatory Commission (PURC).
Firstly, we wish to debunk the misleading conclusion that the PURC has increased the Electricity tarrifs by 27% for all consumers.
A critical look at the tarrif structure as announced reveals that all residential consumers who falls between 0-300 kWh bracket have witnessed a price increase from GHp/kWh 65.4161 to GHp/kWh89.0422, representing an increment of almost 34%.
It should be noted that the bulk of residential consumers fall within the 0-300 kWh bracket and will therefore be adversely affected by the 34% adjustment.
More importantly, we have taken note that the increment is on account of the worsening Ghana Cedi against other major trading currencies.
The Cedi has in recent times witnessed a free fall-reaching almost 50% and currently rated amongst the worst performing currencies in the world.
The country is already realing under a galloping inflation estimated at about 32% thus, this utility tarrif increment will only exacerbate the current high cost of living and will thus worsen the plight of the already impoverished Ghanaian.
Prior to this electriciry tarrif increments, Petroleum products at the pumps have witnessed a collosal increment of about 100%. So far the Energy Debt Recovery Levy has seen an increase of 20%; the Price Stabilization and Recovery Levy is up by 40%. The Unified Petroleum Pricing Formula has been increased by 164%, whilst the BOST margin has been increased from 3 Pesewas to 9 Pesewas representing 200% increase. As if this is not enough, the fuel marking margin levy has also been increased by another 233%.
This is against the background that the volume of petroleum products consumed has increased by 35% from 4 billion litres to 5.5 billion litres.
We are of the strongest conviction that Government can and must do something to cushion Ghanaians who are going through unimaginable hardships with ever worsening poverty levels under the Akufo-Addo/Bawumiah led government.
It will be recalled that following the major tariff review in 2016, the NDC Government intervened, resulting in a reduction of the rate of increment by close to 50%.
We have also taken note of government’s announcement that an unexpected windfall of about USD500,000 from Ghana’s share of petroleum resources was accrued in the 2022 mid-year budget statement.
This statement clearly means government is making huge unanticipated revenues from crude exports hence the need to cushion the suffering masses from these windfalls.
Finally, we wish to caution the PURC to refrain from capturing the AKSA plant which has had its contract tenure expired in the price build-up since that will be illegal.
John Abdulai Jinapor
(MP -Ranking Member, Mines and Energy Committee)