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Ayariga defends 2.45% electricity tariff hike as necessary to save ECG

Faridatu Seidu — Fri, 27 Jun 2025 20:58:22 +0000

Majority Leader Mahama Ayariga has defended the Public Utilities Regulatory Commission’s (PURC) approval of a 2.45% increase in electricity tariffs, calling it a critical measure to address the rising debt of the Electricity Company of Ghana (ECG).

Speaking in Parliament on Friday, June 27, Mahama Ayariga explained that although economic indicators such as inflation, fuel prices, and exchange rate levels have remained relatively stable, ECG’s growing financial challenges make the tariff adjustment unavoidable.

“Last year, there was an attempt to block the PURC from adjusting tariffs, so no adjustments were made during that period. Now, ECG is burdened with significant debt. If we don’t act by adjusting tariffs, ECG will collapse. They won’t have the funds to procure inputs needed to keep generators running, and this will lead to power outages,” he cautioned.

His remarks were in response to concerns from the Minority Caucus, who questioned the justification for the tariff hike amidst perceived economic improvements.

Mahama Ayariga emphasized that consumers must bear part of the cost of electricity production.

“The bills must be paid. Improved macroeconomic indicators don’t erase ECG’s debt. The PURC is only doing its job, and part of the burden must be shouldered by consumers,” he stated.

He also announced that the Minister for Energy and Green Transition will appear before Parliament next week to provide further explanation on the tariff review and its implications.

The new tariff is set to take effect on July 1, 2025.

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Electricity tariffs to be adjusted every three months – Oppong Nkrumah

Faridatu Seidu — Thu, 13 Mar 2025 13:33:43 +0000

Ranking Member on Parliament’s Economy and Development Committee, Kojo Oppong Nkrumah, has disclosed that electricity tariffs in Ghana will now be reviewed every three months as part of the government’s cost-recovery strategy in the energy sector.

Speaking at a press conference held by the Minority in Parliament on Thursday, March 13, Mr. Oppong Nkrumah explained that the policy aims to reflect changes in production costs, fuel prices, and exchange rate fluctuations to stabilise the financial health of the power sector.

“The adjustment of electricity tariffs every three months is meant to reflect changes in production costs, fuel prices, and exchange rate fluctuations,” he stated.

However, he expressed concerns about the impact of the frequent tariff adjustments on consumers, particularly businesses and households already struggling with the high cost of living.

“While the government argues that this is necessary for sustainability, we must also consider how it affects ordinary Ghanaians. Frequent adjustments could place an additional burden on citizens,” he warned.

Mr. Oppong Nkrumah further criticised the government for not implementing adequate cushioning measures to mitigate the effects of potential tariff hikes, warning that without a well-structured approach, the policy could lead to increased hardship and reduced business competitiveness.

He called on the government to prioritise efficiency in the energy sector rather than relying on periodic tariff increases as a long-term solution.

Additionally, he urged for greater transparency in the tariff-setting process and called on stakeholders to engage in broader discussions on balancing sustainability with affordability for consumers.

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Government begins implementation of VAT on Electricity Tariffs

Faridatu Seidu — Wed, 10 Jan 2024 15:40:12 +0000

The government of Ghana has begun the implementation of Value Added Tax (VAT) on electricity tariffs effective January 1st, 2024.

The Ministry of Finance in a statement said the implementation will affect “residential customers of electricity above the maximum consumption level specified for block charges for lifeline units in line with Sections 35 and 37 and the First Schedule (9) of the Value Added Tax (VAT) Act, 2013 (ACT 870) has been scheduled for implementation, effective 1st January 2024.”

However, the VAT is still exempt for “a supply to a dwelling of electricity up to a maximum consumption level specified for block charges for lifeline units”.

The Finance Ministry further urged the Ghana Revenue Authority(GRA) to liaise with the Electricity Company of Ghana (ECG) and the Northern Electricity Distribution Company (NEDCO) for the transfer of collected revenue from the VAT implementation.

Full statement below: