Director of regional operation for the Public Utility Regulatory Commission (PURC), Alhaji Jabaru Abukari, has revealed that there is the possibility for the Commission to review utility tariff downward given that the economy stabilizes.
According to him, despite the significant impact the tariff increment which takes effect today, June 1, 2023, will have on Ghanaians, the situation is beyond the Commission’s intervention. He revealed that some external factors have necessitated the increment.
“The certainty with regards to revision of rates has nothing to do with only increase, there can be a decrease. We just have to see how best we can reduce things that impact on the operation of [utility providers]. When we also have stable economic variables, it’s likely also to impact the rate settings. So, it’s not largely that it might go up.”
Alhaji Jabaru Abukari
Mr Abukari explained that utility companies in the past have clearly stated that they have a lot of under-recoveries in terms of revenue shortage. When this happens, he indicated that they write to the Commission and notify it, and once the Commission is made aware, it factors them into decisions made on the quarterly tariff review.
“There is the possibility that if there is an appreciation of the cedi against the dollar, maybe the other variables, inflation continues to come down, we might not have to continuously be experiencing upwards revision. There’s a likelihood that we might have downward revision.”
Alhaji Jabaru Abukari
Commenting on the IMF deal’s influence on the tariff review, Mr Abukari highlighted that PURC’s operation is “completely independent” even though it works within the government policies. He further noted that these decisions and projections are in the public guidelines of the Commission.
“The guidelines indicate whatever the parameters are… So, the IMF coming in is re-echoing what has been published and what needs to be implemented. So, what we have to do, for the next three months, we are going to do intensive education because it doesn’t look fair for us to know that this is what we are expected to do and we don’t do it. If we can educate and change the mindset of people, then obviously it has the likelihood that it might affect positively the resetting by letting their operational cost come down…”
Alhaji Jabaru Abukari
Consumers urged to use water and electricity conservatively
With regards to the losses and under-recoveries recorded by utility providers, Mr Abukari expressed the involvement of consumers in accounting for it. He explained that some human activities such as unreported burst pipes and illegal connections invariably lead to such upward reviews.
“… The reduction of the losses levels in utility business means a lot. So, some of these attitudes are things that we think that we can control. Those we cannot control will be the variables that are out of the control of the utilities and the regulator – that is the exchange rate, inflation and other things… If the USD appreciates against the cedi, obviously, they will need more cedis for them to get the chemicals; so if we don’t pollute the rivers, they will need some minimal chemicals to be able to treat volumes that are required.”
Alhaji Jabaru Abukari
The Director of regional operation for PURC emphasized that although he is not shying away from IMF’s influence in review of tariffs, quarterly revision doesn’t necessarily mean quarterly increases. Owing to this, he stated that the Commission is looking at the possibility of rates coming down one day.
“If we have the variables moving the same direction as it is for now and we are able to reduce the wastage in the system and able to change the attitudes of various players – consumers and people who live closer to utility installations, we are likely to have downward revisions.”
Alhaji Jabaru Abukari
To ensure the reduction of tariffs in the country, Mr Abukari emphasized the need for consumers to conserve electricity and water. He indicated that they must be very careful the way they use these utilities.
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