The Association of Ghana Industries (AGI) has raised concerns about the timing of the latest electricity tariff increase, arguing that it comes just as Ghana’s economic outlook is improving and global fuel prices are easing.
Speaking in an interview, Chairman of AGI’s Economic Affairs Committee, Eric Defoe, said the impact of the adjustment could be far greater than the announced increase of just over 3%.
“It would appear so nominally, but the effect may not be 3.5% on pricing; it may go higher,” he said.
Mr Defoe explained that electricity is only one part of manufacturers’ production costs, and higher utility charges often lead to additional cost increases across the supply chain.
“Like I tried to explain that the other factors in the basket of production may be affected, and cumulatively it may go to five to 10% or anywhere in that band, so if we are not careful, we don’t know what’s going to happen,” he stated.
He argued that regulators should have delayed the tariff review because fuel prices, a key component in electricity pricing, are already declining following the end of the US-Iran conflict.
“What worries us is that petroleum prices went up; therefore, there was some adjustment in the market, but they’re coming down now because the US-Iran war has ended, and prices are falling back.”
According to him, authorities should have waited to assess the impact of lower global fuel prices before raising electricity tariffs.
“So, at this time, that is also one of the components in the tariff adjustment structure. So, if that’s going to go down, and at this time we are increasing tariffs, maybe they should wait a little bit more and see what happens.”
Mr Defoe stressed that quarterly tariff reviews should not automatically lead to higher prices, especially when key indicators such as inflation, exchange rates and interest rates are improving.
He also questioned why consumers should pay more despite fuel levies introduced to support the power sector, describing the latest adjustment as poorly timed.
