Monday, 8 July 2019

Inflation to rise further


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Adnan Adams Mohammed

Year on year inflation is expected to rise in the months as two major production factors have recorded tariffs increase.

The Public Utilities Regulatory Commission (PURC) recently approved an 11.17 percent tariff increment for electricity and 8.1 percent increment for water, all of which took effect last week.

According to the Ghana National Chamber of Commerce and Industry (GNCCI), manufacturers and services providers are likely to transfer to Ghanaians, the cost associated with the recent increases.

Mark Badu-Aboagye, CEO OF the GNCCI has said, “In the meantime businesses cannot increase their prices to accommodate for the recent increase in tariffs. In the long-term the likelihood is that a portion of this increment will be passed on to consumers, otherwise these businesses will collapse. And this is something we have to critically consider.”

However, the Public Utilities Regulatory Commission at a press conference recently highlighted the factors that have necessitated an increment in these tariffs including the dollar to cedi rate, projected inflation rate and increasing electricity and water demands.

Electricity Cost and cost of the chemicals for water treatment were also cited as reasons for the tariff increases.

The PURC noted, it approved the increase after considering proposals from the Volta River Authority (VRA), the Ghana Grid Company Limited (GRIDCo), the Electricity Company of Ghana (ECG), Power Distribution Services (PDS) Ghana Limited, the Northern Distribution Company (NEDCo) and Enclave Power Company Limited (EPC).

The Executive Secretary of PURC, Maame Dufie Ofori explained that, “Tariff proposals for water also came from these stakeholders and in line with the commission’s regulatory oversight mandate, extensive technical and financial analyses of the proposals were undertaken.

“The key objective of the tariff review was to sustain the financial viability of the utility service providers as well as ensuring the delivery of quality service to consumers,” she explained further.

The last major tariff change  came in September 2018 when the PURC has ordered a 10.08 percent tariff reduction on prevailing rates for all customers of the Ghana Water Company Limited (GWCL).

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