Mixed reactions greet new utility tariffs

Jan - 18 - 2023 

 

  The announcement by the Public Utilities Regulatory Commission (PURC) that tariffs are to go up effective February 1, is being kicked against by a section of the general public who say it will worsen an already difficult situation as, generally, the prices of goods and services have gone up. People expressed worry that the proposed increment would affect their budget which had already been impacted by an increment in VAT and other taxes. A section of the public the Daily Graphic spoke to across the country, made up of small business owners and traders, expressed reservations about the latest increases in utility tariffs, saying it would impact them negatively as the new tariffs would invariably affect their budget. “Schools just reopened and many of us have had to spend our resources on textbooks, school fees and other academic-related challenges. Cost of food remains very high, the new VAT has taken off and adding this tariff increment to our budget means we will be suffocating financially.” They have, therefore, called on the government to as a matter of urgency consider the plight of most Ghanaians and intervene by directing the PURC to rescind its decision. Background Last Monday, the PURC announced plans to increase electricity and water tariffs on February 1, 2023. The new tariffs will push electricity up by 29.96 per cent for all customers and water by 8.3 per cent. The increment was occasioned by the unstable exchange rate, rising inflation, generation mix and weighted average cost of natural gas. The commission approved varying rate adjustments including some reductions for selected industrial and commercial consumers as part of the ongoing restructuring of the existing water rate structure. Businesses suffering In Accra, Jemima Okang Addae and Linda Sah report that a beautician, Kwesi Mensah, said an increase in utilities was further going to increase the cost of living of the ordinary Ghanaian. He explained that the general increase in goods and services, depreciation of the cedi against the dollar, Domestic Debt Exchange and an increase in utilities would be too much of an economic burden for the Ghanaian people to bear at once. “Things are tough and we are struggling to barely survive. This new tariff will increase the economic burden. This will be unbearable. A trader at the Circle Market, Auntie Jemima, also said: “The cost of everything has gone up and it seems government wants to just add to our misery. Already VAT is up, prices of food remain high and now power and water too? If they increase the electricity bill, I will use “bobo” to cater for my daily needs. Those who need the light should go and pay for it,” she added. An employee at an eatery, Kwabena Johnson, said he was worried that the increment would affect people’s purchasing power and by extension, his business as people may want to save money on essentials. “Our businesses have suffered these past two years. The government should have compassion on us, considering the inflation rate and price hikes in goods and services. We are still unable to pay for some bills,” he said. A communications centre operator, Ablade Mensah, also questioned the timing of the PURC decision as the last increment came into effect only last September and wondered if the commission had assessed the impact of the increment on delivery of quality service which it always used as an excuse. “The PURC always comes up with ways to increase tariffs. At the end of the day, you do not see the services. Water is unavailable in some areas. Many people have challenges purchasing power and nothing has been done about it, Why increase the tariffs?” he asked. Passing on cost For Asheley Ashitey, a cold store operator at Tema Manhean, the increment in electricity tariffs would affect the price of frozen meat products, writes Benjamin Xornam Glover from Tema. She said the existing rates were already impacting negatively on her business and having to pay more for the service would further compound the situation. “I am already paying too much for electricity. I spend more than GH¢500 every two weeks on electricity and this upward adjustment will worsen matters. I will have no choice but to pass it on to the consumer," she said. Another cold store operator, Agnes Adjei, said the business was facing some challenges with the new VAT rates and having to add the new cost to their business was not welcomed. Michael Antwi also bemoaned the hike in water tariffs, stressing that it was as though the government wanted to recoup all the money from the free water Ghanaians enjoyed in the heat of the COVID-19 pandemic. 

 more: https://www.graphic.com.gh/news/general-news/mixed-reactions-greet-new-utility-tariffs.html