If you’re wondering why electricity tariffs are going up again, even if just slightly, you’re not alone. From July 1, 2025, electricity prices will increase by 2.45%, following the latest quarterly review by the Public Utilities Regulatory Commission (PURC).
But before you throw your hands up in frustration, here’s a breakdown according to PURC, of why this is happening, and why these reviews are part of how Ghana’s power system stays on its feet.
1. It’s Not Arbitrary — It’s Part of a System
Every three months, PURC is required to review utility tariffs based on what’s happening in the economy. This is not a surprise move, it’s part of Ghana’s Quarterly Tariff Review Mechanism. Think of it as a system that makes sure power producers can still afford to generate and supply electricity without running losses.
2. The Cost of Fuel Is Going Up
Most of the power Ghana uses still comes from thermal plants, and those plants run on natural gas and sometimes even more expensive fuels like diesel and crude oil. The price of gas (known as the Weighted Average Cost of Gas or WACoG) has gone up from $7.63 to $7.71 per MMBtu. It may seem small, but when multiplied across the entire national grid, it adds up, and someone has to cover that cost.
3. The Exchange Rate Is a Big Deal
Electricity generation is partly powered by imported inputs, and many of the contracts in the energy sector are dollar-denominated. That means the cedi–dollar exchange rate matters a lot. For this quarter’s review, PURC used a rate of GHS10.3052 to the dollar. If the cedi weakens, electricity becomes more expensive to generate.
4. Inflation Affects the Cost of Operations
The inflation rate used in this review was 20.67%. When prices of goods and services go up across the country, the utility companies are affected too, they need to pay workers, maintain equipment, and run systems that cost more than they did just a year ago.
5. There’s Debt to Settle
Electricity production and distribution in Ghana have been under financial pressure for years. There’s still an outstanding revenue requirement of GHS488 million that the utilities need to recover, money owed from previous quarters. This isn’t new borrowing; it’s about plugging the gaps that haven’t yet been filled.
6. Backup Power Isn’t Free
Maintaining reserve capacity, backup electricity that’s kept on standby to avoid blackouts, also comes at a cost. It’s like having an emergency generator running in the background. You hope you won’t need it, but you still have to pay to keep it ready.
So, Is This Fair?
That’s a question worth asking. PURC says these small quarterly increases are necessary to protect the financial health of utility companies and prevent bigger problems down the line, like power shortages or complete system breakdowns. Their goal is to adjust tariffs just enough to keep the system running, without putting too much pressure on consumers all at once.
