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Benjamin Boakye, Executive Director of the Africa Centre for Energy Policy (ACEP), has defended the Electricity Company Ghana’s request to hike tariffs by over 150 percent.
The negative impact of the cedi depreciation, combined with increases in the pricing of products and services, are some of the reasons for the tariff revisions, according to him.
Benjamin Boakye said in a Citi News interview that since the last time prices were raised in 2019, the value of the money received has depreciated by at least 30% and that the deficit must be compensated to help power distribution businesses stay afloat.
“The current tariffs were established in 2019, and the cedi has lost nearly 30% of its worth merely due to depreciation.”
Beyond that, everything has become extremely costly.
“You need to change the prices to account for some of those things that affect their operations,” he said, adding that price movement and components have increased across the board.
The Electricity Company of Ghana requested a 148 percent increase in prices for 2022, with 7.6% average changes between 2023 and 2026.
According to ECG, the planned steep increase is due to a disparity between actual cost recovery tariffs and PURC-approved prices, as well as the cost of completed projects.
In a paper given to the Public Utilities Regulatory Commission, it made the decision (PURC).
In a similar paper, the Ghana Water Company proposes an increase in pricing in order to at least recover its operational costs.