Consumer and energy policy advocates are calling for an immediate reduction in electricity tariffs after claims that power users in Ghana paid about GH¢1.5 billion more than necessary under the current pricing structure.

According to a policy review by the Centre for Environmental Management and Sustainable Energy (CEMSE), a review of utility cost recovery figures and tariff adjustments indicates that consumers have been overcharged over a defined billing period due to exchange rate assumptions, fuel cost projections and demand estimates that did not materialise as anticipated.

They argued that the excess revenue collected should now be reflected in lower tariffs.

The stakeholders are, therefore, proposing an 11 per cent downward adjustment in electricity tariffs to compensate households and businesses.

They said the reduction would help ease the cost-of-living burden and provide relief to small and medium-sized enterprises (SMEs), many of which cite electricity costs as a major operational challenge.

Electricity tariffs in Ghana are reviewed periodically by the Public Utilities Regulatory Commission (PURC), which considers factors such as fuel prices, inflation, generation mix and exchange rate movements. In recent years, tariff adjustments have often trended upward, driven largely by cedi depreciation, rising fuel costs and capacity charges owed to independent power producers.

At the centre of the concerns is the methodology used by the Public Utilities Regulatory Commission (PURC). The regulator applied a projected exchange rate of GH¢11.9735 to the dollar for Q4 2025, later adjusted to GH¢12.3715 to cater for under-recovery claims.

However, the actual average exchange rate during the period was GH¢10.8733 to the dollar, creating what CEMSE describes as an over-recovery of GH¢1.1002 per dollar.

Using total quarterly electricity consumption of 6,459 gigawatt-hours — and assuming 60 per cent of generation costs are dollar-denominated — the group estimates consumers paid roughly GH¢1.5 billion for costs utilities did not incur.

The review also points to disparities in inflation projections. While PURC used an annual inflation rate of 12.43 per cent in its Q4 tariff model, average inflation for the quarter stood at 6.6 per cent.

Despite multiple tariff increases, the Electricity Company of Ghana’s (ECG) revenue performance has remained inconsistent. ECG recorded about GH¢1.4 billion in April 2025 before the first tariff adjustment. Revenue fell to GH¢1.3 billion in May after a 14.75 per cent hike, rose to GH¢1.6 billion in June, and declined again to GH¢1.3 billion in August despite further increases.

CEMSE says with the exchange rate now hovering around GH¢10.99 to the dollar and projected Q1 2026 inflation at 3.4 per cent, failure to implement a meaningful tariff reduction would undermine the credibility of the quarterly review framework.

The group is urging regulators to formally recognise over-recoveries and credit them to consumers before introducing new tariff adjustments, warning that inaction could weaken public trust and intensify pressure on households and businesses.