Utility tariff increase poses threats to employment, business survival – AGI

The Association of Ghana Industries has described the level of utility tariff increments for water and electricity by the Public Utilities Regulatory Commission (PURC) as too high for industry to bear, particularly at this time.

It argued that though utility companies need to recover costs to sustain their operations, the effect of the utility tariff increase could be dire for both industry and the utility companies.

Within a period of less than six months, electricity tariffs have shot up significantly on two occasions, 26.6% in September 2022 and 29.9% for this quarter, totaling 56.5%.

“Indeed, the elements of the cross-subsidy are still embedded in our tariff structure and this current review does not seem to support PURC’s effort to correct this anomaly. We, therefore, urge the PURC to expedite action towards the full reversal of the tariff structure in support of Government’s Industrial Transformation Agenda”, it stated.

“We notice a 48% increment in water tariffs for Industry. This is not bearable, and which is a significant deviation from the 8% average increment as announced. Water tariffs shot up by an average of 21% in the last review in September 2022. The aggregate is a 69% increment in less than six months for Industry. We are anxious to see the conclusion of our discussions with the PURC on water tariffs for our beverage companies”, it added.

According to AGI, industries have been under pressure from an unstable business environment, coupled with so much uncertainty since last year, noting “hoping to see signs of recovery this year, the situation is further worsened by the level of increment of utility tariffs which poses a serious threat to employment prospects and the survival of businesses”.

It urged government to ensure efficient utility infrastructure and logistics management to also save cost in these difficult times, adding, “we expect Government to control macroeconomic instability, a major trigger and driver for such sudden changes in tariffs levels and price hikes. We look forward to engaging with the PURC in the coming days.

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