Higher electricity tariff increases are expected next year as the Electricity Company of Ghana (ECG) plans six continuous month of tariff increases from January to June.
The increase, which it to cater for the remainder of the increase ECG had originally demanded for 2013, will come with Monthly Automatic Tariff Adjustments.
The news was disclosed to The Finder newspaper yesterday by the Secretary General of the Trades Union Congress (TUC), Kofi Asamoah.
Mr. Asamoah said representatives of government, the Association of Ghana Industries (AGI), the Ghana Employees Association (GEA), Ghana Chamber of Commerce and Industry (GCCI), ECG as well as Organized Labour have agreed that even though ECG demands 120% increase to achieve total cost recovery, a 59.1% increase, inclusive of taxes and levies, took effect from the beginning of last month, October 1.
This means electricity consumers would have their tariffs reduced initially but see their bills go up next year.
The 59.1% is a reduction of 25% over the 78.9% increase announced last month.
The remaining 60.9% will be spread over a six-month period-from January to June next year plus monthly automatic adjustment for the six month, he said.
According to Mr. Asamoah, this means government will have to provide a GH400 million subsidy for the period. He said industry expressed worry over previous governments failure to deliver on promised subsidies.
He asked government to pay the subsidies to ECG this time round so ECG can continue to supply power. The public Utilities Regulatory Commission (PURC) on September 25 announced a 52% increment in water and 78.9% increment in electricity tariffs effective October 1.
Following the increases, Organized Labour gave the government and the PURC a 10-day ultimatum to reduce the tariffs or face a nationwide strike.
Government responded by setting up a Technical Working Group (TWG)to review the tariffs.
In its report, the TWG indicated that in order to cover at a minimum the cost of generation and transmission, tariff adjustments above 60% might be necessary, taking into consideration the need to minimize the negative budget implication.
However, Organized Labour rejected the 60%, which was minus taxes and levies, saying that taxes and levies would increase the figure to 76%.
Consequently, Organized Labour declared a nationwide strike after failing to reach an agreement with the government and the PURC over the hike in utility tariffs.
The strike, slated for Monday, November 18, would have seen workers in both the formal and informal sectors stay at home in protest against the astronomical increase in utility tariffs.
Organized Labour groups had also planned other actions, but all that have been called off following this agreement.
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