CSOs to PURC: Reduce electricity tariff now!

Mr. Appiah Adomako from CUTS Ghana has made a statement.

CUTS International Accra and the Center for Environmental Management and Sustainable Energy (CEMSME) are urging the Public Utilities Regulatory Commission (PURC). They want PURC to start consultations on reducing electricity tariffs for the third quarter of 2025.

This request comes after significant improvements in macroeconomic conditions. The organizations believe that lower electricity input costs should lead to reduced tariffs for consumers.

In a joint statement, Appiah Kusi Adomako and Benjamin Nsiah highlighted key changes affecting tariffs. The Ghana Cedi has appreciated by about 18% against the US dollar. It moved from GHS15.70 to GHS12.93 in the second quarter.

There is potential for further appreciation before the third quarter begins. Inflation has also decreased to 21.2%, down from 22.49%. This was the rate used to set tariffs for earlier quarters.

Natural gas prices are expected to rise to USD4.20/MMBTU in the third quarter, according to forecasts. However, government subsidies on WACOG will help offset this increase by about USD0.83/MMBTU.

The stronger Cedi is likely to lessen its impact on end-user tariffs. Additionally, hydropower's share in electricity generation may exceed 30%, which could further reduce costs.

“These positive macroeconomic indicators support tariff reduction,” said Adomako. He added that lower electricity tariffs would ease financial pressures on households and industries.

This would also help curb inflation and promote long-term consumer welfare. The statement emphasized PURC’s legal duty under Act 538 to protect consumer interests.

“The Commission must act transparently and engage stakeholders,” they stated, ensuring Ghanaians benefit from economic gains.

PURC reviews electricity and water tariffs quarterly based on macroeconomic factors like exchange rates and inflation rates. These factors directly affect consumer tariffs beyond providers' control.

The organizations stressed that the Cedi’s appreciation should provide relief for consumers. For industries, lower tariffs would decrease production costs, stabilizing prices and boosting growth.

CUTS International Accra and CEMSME called for more transparency in tariff reviews. They expressed concerns over ECG’s inefficiencies that unfairly burden consumers with higher costs.

“PURC must address ECG’s management issues,” Nsiah stated, linking future tariff reviews to necessary reforms for better service delivery.

They urged PURC to enhance stakeholder engagement during the review process, prioritizing consumer interests throughout.

The organizations noted that reducing tariffs could have wider economic benefits as well. Lower electricity prices might stimulate industrial growth, create jobs, and improve Ghana's competitiveness regionally.

They called on PURC to act proactively during this favorable economic climate, providing relief for both residential and commercial consumers.

Background:
On April 11, 2025, PURC announced a 6.52% increase in electricity tariffs effective May 1, based on various projections including an exchange rate of GHS15.6974/USD and an inflation rate of 22.49%.

This decision included half of outstanding revenue arrears from 2024 totaling GHS488.42 million, resulting in a cumulative tariff hike of 14.75% for early 2025 quarters.
Given current economic improvements, CUTS International Accra and CEMSME urge PURC to reverse this trend with a downward adjustment in tariffs.