AGI urges government to reduce tariffs

New Water And Electricity Tariff Adjustments For Consumers
New Water And Electricity Tariff Adjustments For Consumers Image Source:

The Association of Ghana Industries (AGI) had urged the Government to ensure efficient utility infrastructure and logistics management to save cost in these difficult times.

The Association said they expected the Government to control macroeconomic instability, a major trigger and driver for such sudden changes in tariffs levels and price hikes.

A statement issued in Accra by Mr SethTwum-Akwaboah, Chief Executive Officer said they look forward to engaging with the Public Utilities Regulatory Commission (PURC) the coming days.

Utility tariffs are to go up in the first quarter of 2023 effective February 1, 2023.

PURC on Monday, January 16, 2023 announced an increase in end-user tariff for electricity by 29.96 per cent and that of water by 8.3 per cent.

It said they acknowledged that the review was in line with the quarterly automatic adjustment as required of the regulator.

“We do appreciate the changes in the key determinants for tariff fixing since the last review in August 2022,” it said.

However, the statement said the level of utility tariff increments for water and electricity as captured in the PURC’s release were too high for Industry to bear, particularly at this time.

“Within a period of less than six months, electricity tariffs have shot up significantly on two occasions, 26.6 per cent in September 2022 and 29.9 per cent for this quarter, totaling 56.5 per cent,” it added.

It said indeed, the elements of the cross subsidy were still embedded in their tariff structure and this current review does not seem to support PURC’s effort to correct this anomaly.

The statement, therefore, urged the PURC to expedite action towards the full reversal of the tariff structure in support of the Government’s Industrial Transformation Agenda.

It said AGI also noticed a 48 per cent increment in water tariffs for Industry and this was not bearable, and which was a significant deviation from the 8 per cent average increment as announced.

“Water tariffs shot up by an average of 21 per cent in the last review in September 2022,” it said.

AGI said the aggregate was a 69 per cent increment in less than six months for Industry.

“We are anxious to see the conclusion of our discussions with the PURC on water tariffs for our beverage companies,” it added.

The statement said industries were under pressure from an unstable business environment, coupled with so much uncertainty since last year.

It said while the AGI hoped to see signs of recovery this year, the situation was further worsened by this level of increment, which posed a serious threat to employment prospects and survival of businesses.

It said AGI was aware that the utility companies needed to recover cost to sustain their operations, but where end-user tariffs get to unbearable levels, its effect could be dire for both industry and the utility companies.

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