The President of the Ghana Hotels Association (GHA) has hinted at new rates at hotel facilities following the increase in utility tariffs.
Dr. Edward Ackah-Nyamike Jnr stated that the decision would be made by the end of this year after also ascertaining how best customers could be cushioned.
Consumers of electricity and water from this month and beyond will face a steep increase in their electricity and water tariffs – of 27.15 per cent and 21.55 per cent, respectively – as the Public Utilities Regulatory Commission (PURC) approved the increments effective 1 September 2022.
PURC said the increment was necessitated by an unfavourable exchange rate, the rising cost of gas for electricity generation, and chemicals for water treatment, among others.
Dr. Ackah-Nyamike Jnr said given the current circumstances, each hotel is likely to decide on a new rate after considering the effect on its activities.
“No, not that immediate. We will check the actual impact and how best the customer can be cushioned before taking any such decision. Rates are determined by individual hotels. The Association has no hand in that at all. But the statement is a general reference to what the hotels are likely to do under these circumstances,” he said.
He explained that about 30 per cent of hotels’ expenses are the result of water and electricity tariffs, and any upward adjustment could take a toll on the industry.
“Indeed, putting water and electricity together, you are looking at between 15 per cent to about 25 per cent of our expenses. Some can even go as high as 30 per cent,” he said in an interview with B&FT in Accra on 5 September.
Background
The Public Utility Regulatory Commission(PURC) announced the increment on Monday, 15 August 2022, following a proposed increase in tariffs by utility companies.
The Electricity Company of Ghana (ECG) and the Ghana Water Company Limited (GWCL) demanded over a 100% increment in tariff to meet their operational cost, but it was reviewed downwards to 27.15% for electricity and 21.55% for water, respectively, after government intervention.
While ECG asked for an increment in tariffs by 148%, the GWCL also demanded its tariffs go up by 334%.
Announcing the increment, the Chairman of the PURC asked the public to support the utility companies as they aim to recoup lost revenues.
However, customers have expressed dissatisfaction with the proposed tariff increment, citing current economic hardships that continue to push living conditions high.
The ECG has further assured customers and stakeholders of its commitment to smoothly implementing the new tariff.
“It is important to note that the average percentage increase is on energy consumption only. Therefore, the addition of statutory levies and other fixed charges will increase the average percentage announced by the PURC. In effect, individual customers’ tariff percentage increase will depend on customer classification and consumption category. Significantly, exclusive lifeline beneficiaries’ consumption has been pegged at 30kWh, according to the new bands for residential customers.
“ECG has catalogued all unit consumption and the expected cost in a “Reckoner”, which clearly explains how the tariff is applied and billed. This will be displayed at all our districts and customer service centres nationwide to guide customers on their electricity purchases,” a statement signed by the Managing Director, Samuel Mahama said.
The ECG entreated customers “to take charge of their personal consumption by conserving energy which will lead to spending less on electricity.”