According to ACEP, although the proposal is timely, it will put the Public Utility Regulatory Authority (PURC), the body mandated to consider the review, in a tight corner especially when the approved tariff does not tally with government’s proposal.

The Minister of Finance, Ken Ofori-Atta, while presenting the 2018 budget statement to Parliament, announced that government has recommended the review of electricity tariff by between 13 to 21 percent to the PURC.

[contextly_sidebar id=”n1VlHCMMFmgjJTMJP9Ne3aS5gN4RYSRy”]ACEP in its analysis of the budget in relation to the energy and oil and gas sectors, said the situation can “weaken the independence of the institution [PURC].”

“This effort is timely…The 13% proposed reduction will be about 25% on the dollar rate at the time the tariff was last reviewed in 2015. It is however challenging to see the budget prompting the level of reduction before PURC does its job of reviewing the tariff. This puts PURC at war with public expectation of what government thinks is the reductions that should happen. It further weakens the independence of the institution whose acting Executive Secretary is waiting on government for confirmation,” ACEP noted in a statement copied to citifmonline.com.

ACEP recommended to government to focus on how to reduce the bottlenecks that contribute in making electricity tariff too high.

“Government should focus on shaping the fundamental variables that contribute to cost. These include fuel cost, competitive tendering of plant procurement to reduce the cost, bureaucracies in the sector, etc. Consideration of these variables will go a long way to reduce inefficiencies in the sector and allow the regulator to do independent adjustments and announcement of the tariff,” the policy think tank added.

ACEP in its 10-page analysis also made a number of recommendations to government including how to judiciously expend Ghana’s oil money going forward.

Click here for ACEPS full anaylsis:

–

By: Godwin Akweiteh Allotey/citifmonline.com/Ghana

The post Proposed ECG tariff reduction timely but…  – ACEP appeared first on Citi 97.3 FM - Relevant Radio. Always.

According to the Association, cost of power to businesses in Ghana is among the highest, compared to other West African countries.

The Minister of Energy, Boakye Agyarko has already hinted that government will reduce electricity tariff next year.

Speaking to Citi Business News after an Annual General Meeting, the Chief Executive Officer of the association, Mr. Alex Frimpong said its members will dialogue with government for their view to be imputed in the 2018 budget.

“If you listen to the speech of the president, he indicated that all over the world there is price discrimination in favour of businesses. The price of power is always discriminated in favour of businesses, because of the multiplier effect of what businesses can use with power,” he noted.

Mr. Frimpong noted that it is important to make power affordable for enterprises since it is a critical input of cost of production.

Citing some examples, Mr. Frimpong stated that Ivory Coast and other West African countries are working to get cost of power reduced for industry and enterprises.

“It is an important move that will bring into focus the need for price discrimination in favour of enterprises. Given the negotiation, we must also understand the cost of production of power and how it affects us then we can draw the line”.

He stated that the GEA will work will the Ministry of Finance to push for a reduction in the next budget.
–
By: Lawrence Segbefia/citibusinessnews.com/Ghana

The post Employers’ demand reduction in electricity tariff appeared first on Citi 97.3 FM - Relevant Radio. Always.