The Public Utilities Regulatory Commission (PURC) has announced an upward review of electricity and water tariffs, set to take effect from May 3, 2025. The adjustment, part of its Quarterly Tariff Review Mechanism, will see average electricity tariffs increase by 14.75%, while water tariffs will rise by 4.02%.
According to the Commission, the review reflects changes in critical variables such as the exchange rate, inflation, cost of natural gas, and the hydro-thermal power generation mix. The weighted average exchange rate for the second quarter of 2025 is set at GHS 15.6974 to the US dollar, while the cost of gas has slightly decreased from USD 7.8368 per MMBtu to USD 7.6289.
A key factor behind this adjustment is the recovery of GHS 976 million in outstanding revenues from the last three quarters of 2024. PURC explained that only half of this amount will be recovered during this quarter to cushion consumers amid ongoing economic challenges. “Utility companies are bleeding from serious under-recovery,” the Commission noted, adding that tariff reviews are essential for utilities to continue providing reliable electricity and water services.
Impact on Individuals and Businesses
The increase will affect both individuals and businesses. For residential users, those consuming over 300 kWh per month will see an increase of about 30 pesewas per unit, raising their monthly electricity bills. The higher costs come amid already high living expenses, and while only half of the outstanding debts are being recovered this quarter, additional increases may follow later in the year. However, the increased tariffs could help stabilize the electricity and water supply in the long term.
For businesses, the 14.75% rise in electricity tariffs and 4.02% hike in water tariffs will lead to higher operational costs. Businesses with high energy consumption, such as manufacturing plants and cold storage facilities, will experience a significant impact. In response, some businesses may increase their prices to cover the additional costs. Small and medium-sized enterprises, particularly in retail and hospitality, may face challenges as profit margins shrink. The uncertainty surrounding future tariff increases could make long-term planning and budgeting more difficult for businesses.
Electricity and Water Tariff Breakdown
- Electricity Tariffs:
- Lifeline customers (0–30 kWh): Increased from 67.65 GHp/kWh to 77.63 GHp/kWh.
- Residential users (301+ kWh): Increased from 202.52 GHp/kWh to 232.39 GHp/kWh.
- Non-residential users (301+ kWh): New rate is 197.33 GHp/kWh.
- Special Load Tariff (SLT) customers – High Voltage Mines: Increased from 432.18 GHp/kWh to 495.93 GHp/kWh.
- Water Tariffs:
- Residential (0–5m³): Increased from 507.77 GHp/m³ to 528.18 GHp/m³.
- Commercial and Industrial users: Increased from 2,719.07 GHp/m³ to 2,828.36 GHp/m³.
- Public Stand Pipes: Increased from 608.32 GHp/m³ to 632.77 GHp/m³.
Commission’s Commitment and Future Outlook
The PURC reaffirmed its commitment to balancing the financial viability of utility providers with protecting consumers from steep cost increases. While recovering the full outstanding amount would have led to even higher tariffs, the phased approach is aimed at minimizing the burden on households and businesses.
The tariff adjustment comes at a time when Ghana’s power sector is under significant strain. The Electricity Company of Ghana (ECG), the country’s main power distributor, is facing severe financial losses, with estimates showing losses of $67 million every month. ECG is struggling with poor revenue recovery, recouping only 57% of its billed amount. This has resulted in a buildup of debts to Independent Power Producers (IPPs), and some IPPs have been forced to temporarily shut down, exacerbating power outages and raising concerns about a return to persistent power cuts, or “dumsor.”
The PURC’s decision to increase tariffs is part of a broader effort to prevent the collapse of utility services. By recovering only half of the GHS 976 million in outstanding revenue, the Commission aims to provide some relief to utility providers without overburdening consumers. However, consumers should prepare for further tariff hikes throughout the year as the remaining arrears are gradually recouped.
