–BY Daniel Bampoe
Beginning S, May 3, 2025, Ghanaians will pay significantly more for electricity and water, following new tariff adjustments approved by the Public Utilities Regulatory Commission (PURC).
The commission announced that electricity tariffs will rise by 14.75%, while water tariffs will increase by 4.02% across the board for all consumer categories.
The PURC, in a statement signed by its Executive Secretary Dr. Shafic Suleman, attributed the hikes to shifts in the Cedi-Dollar exchange rate, rising inflation, increased cost of natural gas, and changes in the power generation mix.
The commission said it had the option of fully recovering nearly GHS 976 million in revenue shortfalls accumulated over the past three quarters of 2024, but opted to recover only 50% to cushion the public from harsher price surges.
“This is part of the commission’s balancing act—to protect consumers while ensuring utility providers remain financially viable to continue operations,” Dr. Suleman said.
According to the PURC, the decision is in line with its Quarterly Tariff Review Mechanism, which allows for adjustments based on macroeconomic indicators including exchange rates, inflation, fuel costs, and the proportion of hydro versus thermal power generation.
For Q2 2025, the exchange rate used was GHS15.6974 to the USD, alongside a projected inflation rate of 22.49%. The weighted average cost of gas for the quarter stood at $7.6289 per MMBtu.
The electricity generation mix also factored heavily into the decision. For this quarter, the energy supply is projected to rely more heavily on thermal sources—71.2%—with hydro sources contributing 28.8%.
These dynamics, coupled with the outstanding debt from 2024, formed the basis for the rate hike.
Reacting to the announcement, Dr. Gideon Boako, MP for Tano North and a leading figure in the opposition New Patriotic Party (NPP), criticised the National Democratic Congress (NDC) government led by President John Mahama for imposing such increases within just four months in office—despite promises to reduce the cost of living.
“Today, the government of the NDC that promised to reduce the cost of living has increased electricity tariffs by 14.75%. Coming events, they say, cast their own shadows,” Boako wrote on his X page.
He dismissed suggestions that the hikes were inevitable under the IMF programme Ghana is currently under, arguing that the previous NPP government managed to keep tariffs relatively stable even under similar IMF conditions.
Dr Boako shared comparative data indicating that the NDC administration from 2009 to 2016 oversaw a cumulative 294.6% increase in electricity tariffs, while the NPP between 2017 and 2024 increased tariffs by only 57.45%.
Meanwhile, public discontent continues to mount, especially in the business community, where many fear the hikes will further burden operational costs.
The then, Former President Mahama himself has previously criticised the imposition of VAT on electricity as making Ghana “a very difficult place to do business.”
The PURC has indicated that the remaining 50% of the outstanding GHS976 million in arrears will be spread over subsequent quarters in 2025, potentially signaling more increases later in the year.
Minister Begs
Meanwhile, the Minister for Energy and Green Transition, John Abdulai Jinapor, has called on Ghanaians to remain patient and understanding as the country prepares for a 14.75% increase in electricity tariffs.
Speaking at the Committee of Ministers meeting of the West African Gas Pipeline Project in Accra, Jinapor stressed the importance of the review in sustaining the nation’s power supply and advancing ongoing reforms in the sector.
“I want to appeal to Ghanaians and the general consuming public to bear with us even as we make some of these difficult, but unavoidable decisions to ensure that we have stable and reliable power sources for our own economic development,” he stated.
