A Review of the Nigerian Energy Industry

Ghana slashes electricity tariff by 25%

John mahama, president of ghana
Ghana President John Mahama

11 November 2013, Accra – The Ghanaian government has reduced electricity tariff by 25 percent, from 78.9 per cent to 59.18 per cent, with effect from October 1.

A communiqué signed by the deputy Minister of Information and Media Relations, Felix Kwakye Ofosu said the reduction is part of government’s efforts at mitigating the effects of the recent tariff increases.

“After reviewing the report of the technical working group and in consultation with all stakeholders, government have taken measures to cushion the effects of the utility tariff increases on consumers.

“The starting point of the electricity tariff increase towards full cost recovery has been reduced by 25 percent. That means the starting point towards the full cost recovery reduces from 78.9% to 59.18% with effect from 1st October 2013,” the statement said.

The statement also stated that “since the PURC has already gazetted the 78.9% increase in the electricity tariff, Government will absorb the difference between the gazetted increase of 78.9% and the 59.18% (including all levies and charges) as agreed with the social partners.”

A full cost recovery for electricity is expected to be achieved within nine months (from October 2013 to June, 2014), the statement noted further.

In furtherance of the new adjustments, the PURC has been asked to implement the Automatic Tariff Adjustment Formula (ATAF) starting from January, 2014.

The government noted that the reduction “will translate into a subsidy of over GH¢ 400 million to be paid to the utility companies to maintain a steady supply of energy.

“While the full recoverable tariff at the present time amounts to 120 percent increase, Government has accepted the recovery to be implemented over a schedule period using the automatic adjustment formula.”

– The Chronicle

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