By Gifty Arthur
Consumers of water and electricity, have been slapped with tariff increments by the Akufo-Addo government through the Public Utilities Regulatory Commission (PURC) after it announced an upward review of water and electricity tariffs for the fourth quarter of the year.
Interestingly, in August when the government increased the Base Pay, from GHC9.10 per day to GHC10.19 per day, it was to take effect January 2020, according to the Minister of Employment and Labour Relations, Ignatius Baffour Awuah.
The increments coincided with the upward adjustment in the Communication Service Tax (CST) popularly called “talk tax”. This has short high the price of internet services, lowered the length of time phone users spends on their phone among other things by the telecom companies.
But it is the second time in three months that electricity tariff in particular is going up this year. In July, the PURC announced in its“Major Tariff Review” increased in electricity by 11.17 percent.
This was after the July 2019 Mid-year Budget Review announced and implemented a major increment of the Energy Sector Levies to pay for capacity charges.
Consumers, have described the recent hikes as lacking basis, defying logic and insensitive.
The tariff increments, which took effect yesterday, Tuesday October 1, 2019, saw water go up by 2.22 per cent, while electricity goes up by 5.94 per cent across the board for all customers.
A statement signed by the Executive Secretary of the PURC, Mrs. Mami Dufie Ofori, said the increment was determined by the Automated Adjustment Formula (AAF), a tariff mechanism that seeks to track and incorporate movement in key determining factors to reflect the real cost of electricity and water quarterly.
Government has since remained quiet notwithstanding public bashing.
This last quarter increment, according to PURC’s statement, was done taking into consideration some factors, which include inflation, the cedi-US dollar exchange rate, the price of crude oil, natural gas and fuel mix.
The power purchase cost, demand forecast and the cost of electricity (a major cost component in water production) also influenced the latest increment.
Meanwhile, telecommunication firms have also began charging customers the revised Communication Service Tax (CST) from yesterday the Ghana Chamber of Telecommunications (GCT) said.
The Chamber, in a statement said, “The Ghana Chamber of Telecommunications on behalf of its members – AirtelTigo, MTN and Vodafone – wishes to notify its esteemed customers and the general public of the increase in Communication Service Tax.”
“As intended, the incidence of the modification will thus be on consumers. It will impact the cost of telecommunication services,”
The statement added that the “CST, which is now at 9%, will be applied to any recharge purchase. For every ¢1 of recharge purchased, a 9% CST fee will be charged leaving ¢0.93 for the purchase of products and services.”
Finance Minister, Ken Ofori-Atta, in the Supplementary Budget announced an increase in the Communication Service Tax (CST) from 6 to 9 per cent.
According to the Minister, the increase was to help develop the foundation for a viable technology ecosystem in the county. This will comprise putting in systems to identify and combat cybercrime, protect users of information technology and combat money laundering and other financial crimes.
Mr Ofori-Atta, maintained that sharing ratio would be done in a way that the National Youth Employment programmes, would continue to receive the same portions as the current cycle. In 2018, the tax was first introduced at an Ad Valorem Rate of 6 per cent.
The tax is levied on charges payable by consumers for the use of communication services.
In 2018, the tax brought in a total of ¢420 million, representing a 27.7 per cent increase from the estimated ¢304 million accrued in 2017.
The amount generated from the levy was 4.56 per cent more than the projected ¢401.8 million in the 2018 mid-year budget.
Earlier last month, prices of the various petroleum products went up after the various Oil Marketing Companies (OMCs) were directed by the National Petroleum Authority (NPA) to start applying revised Energy Sector Levies.
The NPA’s directive was as announced in the Supplementary Budget presented by the Finance Minister.
Based on the revision, petrol would witness a ¢0.20 adjustment, while Diesel, would also attract ¢0.20 jump in price per litre.
The increase was as a result of the Road Fund Levy, Energy Debt Recovery Levy, as well as the Price Stabilization and Recovery Levy increased up 20 per cent.
The development meant that, the percentage of levies on various price build up on each product would go up.
This means that the litre of petrol is sold at around ¢5.39 for both petrol and diesel and 4.5-litre gallon is being sold at around ¢24.25.
Oil marketing firm, Shell, took the lead by increasing each litre of petrol and diesel by ¢0.19 effective September 1 2019.
This is resulting in their service stations around the country adjusting their prices as displaced on their boards as Super goes for ¢5.38 and Diesel selling for ¢5.38.
A kilogram of LPG went up by ¢0.08.
Some of the OMCs, told JoyBusiness that it might be difficult to absorb the expected increase because their margins and profits have not been that good due to the increased competition in the sector.
Meanwhile, former Deputy Minister of Power in the John Mahama administration John Abdulai Jinapor,, has called on President Akufo-Addo to apologise for deceiving Ghanaians.
In a statement copied The Herald on the increment, he charged “the Public Utility Regulatory Commission yesterday announced another Electricity Tariff increment this year taking effects from 1st October 2019. This increment clearly lacks basis and defies logic”.
“It will be recalled that the PURC in its Major Tariff Review increased Electricity by 11.17% taking effect from 1st July 2019. It therefore comes as a shock that in just under 3 months, consumers are being called upon to shoulder an additional 5.94% increment”, adding “the critical question is; what has really changed within this short period to warrant such a steep increment”.
To him, “Even more disturbing is the fact that the Akufo-Addo-led government during the July, 2019 Mid-year Budget Review, announced and implemented a major increment of the Energy Sector Levies to pay for capacity charges”.
The Member of Parliament of Yapei Kusawgu, charged “Contrary to the reasons given by the PURC, this recent increment is only a clandestine attempt to satisfy the already blotted Opex presented by PDS to PURC with the connivance of some top government officials who helped PDS draft a response for these outrageous claims?
He questioned “Is this increment targeted at the proposed restructuring of the PDS deal with the objective of satisfying some cronies in their quest to take over the PDS deal through the backdoor?
He added that “This new increment, coming on the heels of recent upward adjustments of Energy Sector Levies, Transport fares, Petroleum Prices, Communications Service Tax as well as Electricity Tariffs is unjustified and must be condemned in the strongest terms possible as this will only aggravate the worsening conditions of ordinary Ghanaians.
“The Akufo-Addo government since assuming office has completely lost focus and continues to adopt very poor policy decisions in the Energy Sector.
A clear case is the populist but unwise decision to usurp the functions of the PURC by announcing a so called reduction in Tariffs in the early part of 2018 resulting in huge revenue shortfalls in the electricity value chain culminating in mounting debts which is threatening the Energy Sector SOEs and IPPs”.
Mr Jinapor’s statement insisted that “it is now abundantly clear that the so-called reduction was not only a populist political gimmick but a complete charade compounded with the all-time scandalous PDS transaction which has now become an albatross on the neck of this government”.
“President Akufo-Addo and the NPP must, without further delay, apologize profusely to the good people of Ghana for deceiving them, adding “It is most shocking to note that despite all the illegality and scandal surrounding the PDS deal, this government insists on keeping the PDS deal by going through a backdoor to re-structure the shares of PDS.
“..Finally, the opaque manner in which the Energy sector is being managed coupled with the excessive political interference is gradually eroding the little confidence consumers had in the PURC”.
The MP, observed that “the PURC is fast losing its relevance and must be reformed immediately. The PURC and PDS, must as a matter of urgency publish the Gazzete and Reckoner respectively for public scrutiny”.
He asked the “Akufo-Addo and his government, should also be reminded that, no amount of clean up on this mega PDS scandal will wash. We stand ready any day any time and will make sure Ghanaians are not shortchanged”.