The Effect Of Tariff Increases On Water And Electricity By PURC

By Ghanaian Chronicle
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By Ghanaian Chronicle

10/10/2013 2:30:16 PM -

The retail price of sachet water from 10 pesewas to 15 pesewas, an increase of 50 per cent instead of 12 pesewas or 20 percent, on the open market, has received mixed reactions in parts of Accra. A bag of sachet water, which previously sold at GH¢1.80, now goes for GH¢2.20, while a sachet of water is now selling at 15 pesewas instead of 10.

 
A cross section of Ghanaians in and around Accra have kicked against the increase in the price of sachet and bottled water. The Association of Sachet and Bottled Water Producers increased the price of the commodity by 20%. They cite the upward adjustment of utility tariffs as the main reason.

In and around the Dome Market in the Dome Kwabenya Constituency, many people, especially passengers of vehicles, who hitherto patronised the sachet water, have refused to pay 15 pesewas insisting that it is not realistic, saying that it has to be 12 pesewas. Where would this leave the sachet water sellers, who are unable to have rapid sales of the water even in warm weather when water is in great demand? Since the young retailers sell sachet water for a living, we need to sympathise with them in these trying moments of their business.

 
If retail sales of the product continue to go down, as is the case now, it would not only affect the retailers, it would also affect the water producers in the capital city of Accra and across the country. As said earlier, the increase in the price of sachet water followed a decision by the Association of Sachet and Bottled Water Producers to increase the prices of sachet and bottled water, to enable them raise enough revenue to meet the increased cost of production.

 
However, I doubt whether there is a guarantee that the increase in the cost of water on the open market would automatically lead to an increase in revenue to the water producers, to be able to meet the high cost of electricity. The end result of this is that the water producers may also begin to cut down their staff strength. The sale of water on our markets and along our highways might also be affected, thereby getting thousands of girls and boys living off the water sales out of work.  I don't think this is what we want to happen.

 
The Trades Union Congress (TUC) and some civil society groups are up in arms against the government allowing increase in water and electricity tariffs for domestic and industrial and commercial users, saying that would be counterproductive. TUC says the recent tariff increases announced by the Public Utilities Regulatory Commission (PURC) are too high for Ghanaian workers to pay.

Outraged by the rate of the increases, the TUC said: 'It finds a near 80 per cent increase in electricity tariffs, and over 50 per cent increase in water, to be too high and well above the pocket of the ordinary Ghanaian.'

A statement issued by the TUC at the end of its Steering Committee meeting on Monday night, indicated that the magnitude of the increases could only be described 'as insensitive and a stab in the back of the Ghanaian.' According to the TUC, while the worker got a 10 per cent increase in salaries, they cannot afford the increase of 50 and 70 per cent water and electricity increases respectively.  The Committee for Joint Action (CJA) is also asking the government and the Public Utilities Regulatory Commission (PURC) to reverse the recent increases in tariffs. According to group, the new tariffs are 'unfair and insensitive.'

Speaking on Eyewitness News, the convener of the group, Kwesi Pratt Jnr., said: 'The imposition of these tariffs is an attempt to pass on the cost of inefficiency and maladministration to innocent consumers of the utilities.' He said utility companies in the country have been engulfed by corruption and wastage during the generation and production of electricity and water respectively. The CJA, in a statement, said '… it is time to take a long term view of meeting the energy and water needs of Ghana. This must necessarily include efforts to reduce the cost of generating power, and producing potable water for mass distribution.'

The CJA, in its statement, expressed its readiness to join hands with other groups to force the government to 'reverse these increases.'

 
Currently, as a result of the tariff increases that are likely to affect their production, the mining industry in Ghana is poised to offload close to 4,000 employees across the country. According to Dr. Tony Aubynn, Chief Executive Officer of the Ghana Chamber of Mines, some of the mining companies have began giving hints of how many employees they would throw out of employment in the coming days.

 
There is a growing fear that not only the Chamber of Mines will react to the increase in the tariffs by the PURC. Others may follow suit. However, to solve the problem, there is the need for a consultative meeting with the stakeholders, including the workers' bodies and consumers, on this issue to be able to find solutions to the effects of tariff increases in the country.

Disclaimer: "The views expressed in this article are the sole responsibility of the author and do not necessarily reflect those of Modern Ghana. The contents of this article are of sole responsibility of the author(s). Modern Ghana will not be responsible or liable for any inaccurate or incorrect statements contained in this article." © Ghanaian Chronicle.

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