Ghanaian consumers may see a notable decrease in electricity tariffs for the first quarter of 2026, following a report by the Centre for Environmental Management and Sustainable Energy (CEMSE) that highlights substantial over-recovery in late 2025.
The report reviews the Public Utilities Regulatory Commission’s (PURC) Quarterly Tariff Review Mechanism, which aims to balance utility financial viability with fair pricing, but indicates that recent tariff adjustments significantly overstated actual costs.
CEMSE notes that the fourth-quarter 2025 tariff hike of 1.14% relied on a projected cedi to US dollar rate of Ghc 11.9735/USD, later adjusted to Ghc 12.3715/USD to account for claimed under-recoveries. The actual average exchange rate for the quarter was Ghc 10.8733/USD, a discrepancy described as a “dramatic overestimation” of cost pressures. When applied to the quarter’s electricity consumption of roughly 6,459 Gigawatt-hours, with 60% of generation costs dollar-denominated, the overcharge is estimated at about Ghc1.5 billion.
Inflation projections further compounded the over-recovery. PURC applied a rate of 12.43% to maintain utility revenues, whereas actual inflation averaged 6.6%. CEMSE observes that consumers effectively “subsidized utility finances against a phantom cost scenario” over the quarter.
Revenue performance for the Electricity Company of Ghana (ECG) has also been inconsistent. Despite tariff hikes in early 2025, 14.75% in the first two quarters and 2.45% in the third, monthly inflows fell to Ghc1.3 billion in May and August after peaking at Ghc1.6 billion in June. The CEMSE report indicates that the increases have not consistently strengthened revenue mobilisation, pointing to structural challenges in collection and compliance.
The economic context for the first quarter of 2026 reinforces the case for correction. The current exchange rate stands at approximately Ghc 10.99/USD, about 6.35% lower than the baseline used for Q4 2025, while projected inflation is just 3.4%. CEMSE recommends that regulators formally acknowledge the Q4 2025 over-recovery as a consumer credit and apply it to offset costs for Q1 2026. The tariff should then be recalculated using the lower exchange rate and modest inflation projection, a process likely to produce a reduction of around 11%. They stress that this adjustment is not a subsidy but a “mechanical and righteous outcome” of applying PURC’s cost pass-through formula accurately.
The report warns that failing to implement a meaningful tariff reduction risks eroding public trust in PURC’s mandate and signals a one-way mechanism that passes on costs swiftly but struggles to return overpayments. For households and businesses, timely correction could ease financial pressure and support economic recovery by restoring disposable income.
