Utilities consumers are expected to pay more for electricity and water following an upward adjustment in electricity and water tariffs by the Public Utilities and Regulatory Commission (PURC)--the sector regulator.
The PURC, on Tuesday, announced a 6.54 percent increase in electricity tariff and a 4.54 percent increase in water tariff making it the third time this year that the Commission has increased tariffs for electricity and water.
This brings to a cumulative 28.27% rise in electricity tariffs and 17.44% for water since January this year.
The PURC has explained that the latest increase in electricity tariff- amidst irregular power supply over the past months- is due to the shift to crude oil for power generation due to low volume of gas supply from Nigeria.
The contractual volume that Ghana is to take delivery of from Nigeria is 120million standard cubic feet.
However, given the local demand in Nigeria, it has been virtually impossible for the NGas to supply the required contractual volume.
Total demand in Nigeria is about 1.6 billion standard cubic feet of gas while the total gas production is about one billion -- hence, there isn’t enough for Nigeria’s domestic market.
One Volta River Authority’s (VRA) turbine (thermal) consumes 5,000 barrels of crude in a day. The Authority requires US$55million to purchase crude every three weeks.
According to the PURC, Ghana Water Company is not to charge the new rates until certain concerns about its operations are addressed.
The PURC now adjusts utility tariffs quarterly following the implementation of the automatic tariff adjustment formula, which is a tariff mechanism that tracks and incorporates movements in key determining uncontrollable factors to reflect the cost of electricity and water every three months.
In adjusting utility tariffs, the Commission consider Cedi-US dollar exchange rate, inflation, price of crude oil and natural gas, chemical cost, electricity cost, power purchase cost, demand forecast variations, energy generation mix and fuel mix as the key variables in determining tariffs.
The PURC in June this year announced an increase in electricity and water tariffs by 12% and 6.1% respectively following an earlier adjustment in the tariffs by 9.73% for electricity and 6.80% for water in January.
The latest increase in utility tariffs implies more pain in store for consumers- who are also struggling with energy supply rationing and rising transportation cost.
It is also expected that fuel prices will imminently go up as the International Monetary Fund (IMF) has strongly recommended to government to scrap subsidies on energy and fuel consumption as the IMF prepares to bailout Ghana from its recent economic woes.
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