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Industries fear closure if tariff continues to rise
21 Jul '10
2 min read
As per the President of the Association of Ghana Industries (AGI), Nana Owusu Afari, the recent hike of 89 percent and 36 percent in power and water tariffs, respectively by the Public Utility Regulatory Commission (PURC) this year, was not the right move. If the same is not reduced then industries such as textiles, plastics, steel and cement will be forced to closure, thereby resulting in job losses.
Already, industries are trying to tackle the increased cost of doing business in Ghana, with respect to interest rates, level of taxation, multiplicity of taxes and the like. The rise in electricity tariffs would only further aggravate their situation, making industries in Ghana less competitive, averred Afari.
However, while addressing a press conference, Afari stated that, tariffs as announced by PURC did not quite mirror the actual situation on ground. He further continued that, the adjustments ended in rise of 131 percent for the lower voltage consumers and 300 percent for the high voltage consumers, as compared to the 89 percent declared by PURC.
Further more, as per information garnered from their members on the input-output rate evaluation of usage of power, supported their stance that, tariff rise ranged between 131 and 300 percent, which according to Afari and members was way too exorbitant.
Therefore, Afari suggested that in order to protect the industries from shutting down, PURC would have to consider restoration of the tariff change mechanism, which was suspended since three years. Under this mechanism, tariffs were raised regularly but on a gradual basis, instead of leaving a long gap and all of a sudden levying high utility rates on consumers.
Already, industries are trying to tackle the increased cost of doing business in Ghana, with respect to interest rates, level of taxation, multiplicity of taxes and the like. The rise in electricity tariffs would only further aggravate their situation, making industries in Ghana less competitive, averred Afari.
However, while addressing a press conference, Afari stated that, tariffs as announced by PURC did not quite mirror the actual situation on ground. He further continued that, the adjustments ended in rise of 131 percent for the lower voltage consumers and 300 percent for the high voltage consumers, as compared to the 89 percent declared by PURC.
Further more, as per information garnered from their members on the input-output rate evaluation of usage of power, supported their stance that, tariff rise ranged between 131 and 300 percent, which according to Afari and members was way too exorbitant.
Therefore, Afari suggested that in order to protect the industries from shutting down, PURC would have to consider restoration of the tariff change mechanism, which was suspended since three years. Under this mechanism, tariffs were raised regularly but on a gradual basis, instead of leaving a long gap and all of a sudden levying high utility rates on consumers.
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