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Gov’t interfering in PURC work- Economic


By: Fred Yaw SARPONG
fsarpong@theeventpr.com

Government has been accused of interfering in the work of Public Utility and Regulatory Commission (PURC) for setting electricity tariffs for power consumers in the country without the approval of the commission.
The Head of Department of Finance, School of Business at the University of Cape Coast, Dr. John Gatsi it si unfortunate for the government to set electricity tariffs and push it on PURC to accept.
“We are practising a liberal market system of which we have institution that are supposed to engage in price determination for tariffs and petroleum products,” he told the Daily Express in response to the 2018 Budget Statement presented to the Parliament by the Finance Minister, Mr. Ken Ofori-Attah.
The 2018 Budget Statement is the third fiscal policy of the government since assumed office in January, 2017.
He mentioned that it is the National Petroleum Authority (NPA) that has been mandated to set petroleum prices for pricing on petroleum products and PURC does it for utilities. “Therefore it is interference in the work of the PURC for government to try to reduce price of tariffs in the budget,” he added.
Few months ago, many Ghanaians raised issues of the electricity tariffs urging the government to reduce the tariffs. Dr. Gatsi said in order to response to that position, the government through Mr. Ken Ofori-Attah in presenting the budget said that they are proposing those tariffs cut to PURC to consider.
“So if the PURC agreed, then the reduction will take effect, which also means that if the commission do not agree, then the reduction will not take place,” he mentioned.
However, as we speak now, the PURC doesn’t have a Chief Executive Officer (CEO) or even the board to champion this cause.
“The PURC is an institution that has been rundown and need reconstitution, and focus to deliver,” Dr. Gatsi pointed out.
He emphasized that what the government is doing means that indirectly it taken over the work of the PURC. This is coming from the government is problematic and disturbing.
Per the 2018 Budget Statement, government it will ensure that electricity tariffs are reduced. In fulfilment of this promise, government has reviewed the tariff setting methodology and cost structure of power production. This review has resulted in recommendations that will be made to the PURC for consideration.
Mr. Ofori-Attah said in this regard, in 2018, efforts will be geared towards keeping the lights on at affordable rates to consumers, particularly industries and small businesses 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 Minister said.
He further said to give relief to the poor whose individual consumption actually falls in the subsidised life-line category but who live in a compound house, the existing 4-tier tariff classification of residential consumers will be collapsed into Lifeline and Non-Lifeline consumers in phases.
On the basis of these interventions, if government recommendations to PURC are accepted, consumers will be expected to benefit from reductions in electricity tariffs.
The expected average tariff reductions across various customer categories will be as follows:
2018 Electricity Tariff Proposals
Customer Category Average Reduction
Residential 13%
Non Residential 13%
Special Load Tariff- Low Voltage 13%
Special Load Tariff -Medium Voltage 11%
Special Load Tariff -High Voltage 14%
High Voltage Mines 21%

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