The Finance Minister, Ken Ofori-Atta, has proposed an average reduction of 13 percent in electricity tariffs for residential consumers of electricity.
Consumers in the non-residential category will also see a 13 percent drop in tariffs.
The high electricity tariffs were a major part of the New Patriotic Party (NPP)’s campaign ahead of the 2016 elections, with many of the party’s communicators claiming that electricity cost more than rent.
The Akufo-Addo government explained previously that it could not reduce the tariff in the 2017 budget due to moves to stabilize power supply in the country.
Finance Minister, Ken Ofori Atta’s budget reading reminded of the hardship Ghanaians endured during the height of the power crisis between 2013 and 2015.
Following promises to reduce electricity tariffs, Mr. Ofori Atta said Akufo-Addo administration has now revised tariff setting methodology and cost structure for power production.
He said recommendations are going to be made to the Public Utilities Regulatory Commission in this regard, which will bring a little more relief to businesses and domestic users of electricity.
Finance Minister, Ken Ofori-Atta
“In 2018, efforts will be geared towards keeping the lights on at affordable rates to consumers, particularly industries and small business through reform and policy interventions over a two-year period. The electricity tariff structure will be realigned with government’s developmental goals of industrial transformation growth and job creation,” the Finance Minister explained.
There are six customer categories; residential, non-residential, special load tariff (low voltage), special load tariff (medium voltage), special load tariff (high voltage) and high voltage mines.
The proposals granted High voltage mines the biggest reprieve with 21 percent. The other categories will see drops around 13 percent if the proposals are considered.
Scrapping of 4-tier tariff system
In providing relief to the poor, who consume within the lifeline subsidies, but are likely to be living in compound houses, thus robbing of them such benefits, the current 4-tier tariff classification for residential consumers “will be collapsed into lifeline and non-lifeline consumers in phases,” Mr. Ofori Atta said.
Lifeline users currently pay 33.56 pesewas per kilowatt hour in addition to the 633.17 pesewas service charge monthly.
Initial skepticism from NDC
Members of the Minority in Parliament were however skeptical of the government’s pledge to reduce electricity tariffs in the budget.
According to the Minority Spokesperson on Mines and Energy, Adams Mutawakilu, the expectation of gas coming on stream to power thermal plants as a means of driving down electricity cost for the ordinary Ghanaian would not materialize.
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