AGI rejects new utility tariffs

The Association of Ghana Industries (AGI) has registered its dissatisfaction at the level of increment in the last major utility tariffs review for the beverage sector under Industry.

The association said they do appreciate the changes in the key determinants in tariff fixing and therefore reasonable changes in tariffs do not come as a surprise.

However, the said, notice the principle of equity was largely missing in the major tariff review conducted in August last year for water, where a particular customer category was being asked to bear a 316% increment in a single tariff review.

“Indeed, our beverage companies under Industry have always belonged to the Industry
category of water users. Surprisingly, the last major tariff review in August 2022 saw an
introduction of a new end-user category, Commercial Bottled Water and Drinks, quite alien
to the PURC gazette. Indeed, the increment for this new consumer category alone was 316%, over and above the 21% average increment reported for water.

“This is the new category our Beverage companies within Industry are being unfairly re-assigned. We acknowledge the water tariff reduction from the 316% (Ghc45.94/1000 litres) to 172% (Ghc30.00/1000 litres) subsequent to our meetings with the PURC but this is still unbearable,” a statement said.

It added “We do not think the creation of a new Consumer category addresses the challenges in our water distribution system. Such astronomical tariff increment in a single revision is retrogressive and shows no empathy for Ghana’s ailing Industrial sector. We all need to wake up to the looming collapse of our local industries which hold the key to job creation and our economic recovery.”

“The AGI reiterated that a tariff increment of 316% and subsequently 172% for its
beverage sector under Industry will have dire consequences for Industry and the Ghana Water Company (GWCo).

“Our Utilities risk of losing revenue if this trend ends up collapsing the companies. We think it is unfair for the PURC to demand a significant share of revenue from Industry, whose cost of service is cheaper. We urge the PURC to make public the real cost of service for each consumer category to engender transparency and fairness.

“Again, we notice a 48% increment in water tariffs for Industry effective this February, which is a significant deviation from the 8% average increment as announced.
Within a period of less than six months, electricity tariffs have also shot up significantly on two occasions, 26.6% in September 2022 and 29.9% for this quarter, totalling a whopping 56.5%. Industries have been under pressure from an unstable business environment. Hoping to see signs of recovery this year, the situation is further worsened by this utility tariff increment, inflation at 54.1%, VAT at 21.9%, fuel prices inching up, and threats of excise duty increments, which pose a serious threat to employment prospects and survival of businesses.

“With the foregoing, AGI is calling on the PURC to maintain its beverage sector companies in their Industry category which has also seen an increment of 48% in water tariff. We believe Industries are a high-revenue customer for GWCo and deserve equity in the water pricing we see. We urge the Government to help stem the tide of our macroeconomic instability, which is a major trigger for some of the changes in tariffs levels and price hikes.
AGI is looking forward to further engagement with the PURC and the Utility Service Providers in the coming days.”

Source: 3news.com|Ghana