AGI urges PURC to reconsider utility tariff hikes

Accra, Ghana - The Association of Ghana Industries (AGI) is urging the Public Utilities Regulatory Commission (PURC) to rethink its decision to increase utility tariffs for the third quarter of 2024.

As of today, October 1, electricity rates will rise by 3.02%, while water tariffs will see a 1.86% increase ¹. The PURC attributes this hike to fluctuations in the exchange rate.

However, the AGI is concerned that these increases will have a ripple effect, raising operational costs for manufacturers and diminishing consumers' purchasing power.

Tsonam Akpeloo, the Greater Accra Regional Chairman of AGI, expressed these concerns to Citi Business News in Accra, highlighting the potential strain on businesses and households.

“We’re asking the regulatory authority to be concerned about the flight of index and ensure that at least in the next quarter, they either take steps to reduce it or maintain it at the previous rate because this increment is not going to be going well for industrial development," he stated.

“As I mentioned, it would be a price that will easily have to be absorbed by the producer, because at this rate, we cannot push it to the consumer. A lot of companies are really getting out of business because of these high levels of utility tariff,” he added.

The AGI's plea comes at a time when the industrial sector is already grappling with economic challenges. With the utility companies facing revenue losses and potential collapse, the AGI emphasizes that PURC's demand for a significant share of revenue from industries is unfair, given the cheaper cost of service.

Key Concerns:

- _Increased Operational Costs_: Higher utility tariffs will raise production costs for manufacturers.

- _Diminished Purchasing Power_: Consumers will have less disposable income due to increased utility bills.

- _Revenue Losses_: Utility companies risk losing revenue if businesses collapse.

Meanwhile, the PURC has justified the tariff hikes, stating that they are critical to keeping utility service providers operational amidst economic challenges.

However, the AGI's concerns underscore the need for a balanced approach that considers the impact on industries and consumers.

Source : Lead News Online