The government’s reduction of electricity tariffs, as announced in the 2018 Budget Statement and Economic Policy, offers relief, especially for the industrial sector.
High voltage consumers are to witness a 21 percent tariff reduction with special load tariff medium voltage getting 11 percent reduction, and special load tariff high voltage getting 14 percent reduction. Residential consumers and non-residential consumers are expected to benefit from an average 13 percent reduction in tariffs.
The tariff reduction recommendations are subject to the approval of the Public Utilities and Regulatory Commission (PURC).
Announcing the recommendations in the 2018 Budget presented to Parliament on Wednesday, the Minister of Finance, Mr Ken Ofori-Atta said the “government has reviewed the tariff setting methodology and cost structure of power production. The review has resulted in recommendations that would be made to the Public Utilities and Regulatory Commission for consideration as per the law.”
The proposed tariff reduction comes after incessant concerns by the Association of Ghana Industries (AGI) over the high electricity tariff which was adversely affecting businesses.
The reduction is expected to directly result in the expansion of production for many industries, which would translate into increased employment.
It is also expected to help companies which suspended production of product lines due to the high cost of power, to resume operations which would yield to the benefit of the labour market.
The second quarter business barometer report of the AGI released in August this year said that despite the relative stability in power supply, cost of electricity remained a major challenge to businesses in Ghana.
According to the report, the current cost of power to an industry at 19 cents per kilowatt-hour is a major challenge to members of the AGI, indicating that electricity accounts for over 30 percent of production cost to industries.
By Nii Adotey/adrdaily.com
