According to CUTS International Accra, a consumer sovereignty research and public policy think tank, utility companies’ calls for higher tariffs are justified and must be considered.
Its Executive Director, Appiah Adomako, stated that if tariffs are not adjusted, utility companies’ operations may come to a halt.
On The Point of View on Monday, he said that while increasing tariffs may strain consumers’ finances, the current state of utility companies and other market factors make it necessary.
He claims that because products required for the operations of the Ghana Water Company Limited and the Electricity Company of Ghana are imported, the depreciation of the cedi, among other factors, has increased the costs incurred by the companies.
He claims that preventing ECG and the Ghana Water Company from raising tariffs will prevent them from making necessary investments.
“We can’t be irrational because ECG imports most of the things it uses; crude oil is imported with all of the dollar and exchange rate issues.” If you don’t allow utility companies to raise their prices, there won’t be the necessary investment to keep the system running, and we’ll end up with no electricity one day. “There will be no incentive for investors to enter the sector, particularly Independent Power Producers,” he argued.
Utility companies have indicated their resolve as many Ghanaians continue to struggle with the country’s rising cost of living.
ECG, for example, is proposing a 148 percent increase in tariffs, while Ghana Water Company Limited is proposing a nearly 326 percent increase in tariffs.
Some have called the proposals outrageous, but Appiah Adomako believes they are justified.
“I agree that tariffs should be raised so that the ECG can carry out its mandate.” The water company purchases chemicals, which are imported. The exchange rate, freight, and the cost of the items themselves have all increased, so we need to give them a raise so that the business can continue,” he explained.
He was optimistic, however, that the percentage increase would be far less than requested, ensuring that consumers are not overburdened.
“PURC will look at them. If you look at the historical data, PURC will give them not more than 50% of their request,” he noted.