Ghana’s businesses and households are bracing for another potential electricity price increase before the end of March, with industry players warning that a fresh upward adjustment by the Public Utilities Regulatory Commission (PURC) could deepen financial strain that the January hike has already inflicted on an economy still in recovery mode.
The PURC implemented a 9.86 percent increase in electricity tariffs across all customer categories on January 1, 2026, as part of its 2026 to 2030 Multi-Year Tariff Order (MYTO), a five-year framework that followed months of investment hearings, stakeholder consultations and regional public forums. Water tariffs rose simultaneously by 15.92 percent. That structural repricing now sits on top of quarterly reviews the commission has confirmed will continue throughout the five-year MYTO cycle, with the first due before the close of the first quarter.
The impact of January’s adjustment is already visible in official data. According to the Ghana Statistical Service (GSS), electricity and gas inflation surged from 6.1 percent in December 2025 to 14.8 percent in January 2026 on a year-on-year basis, a rate nearly ten times the national producer price inflation average of 1.6 percent for the same period.
The structural driver behind the January increase and any further quarterly adjustments is Ghana’s shifting electricity generation mix. Thermal power is projected to account for 78.79 percent of electricity generation during the 2026 to 2030 period, up from 70.75 percent in 2025, while the share of hydropower declines from 28.80 percent to 20.90 percent. The weighted average cost of gas rises to US$7.8749 per million British thermal units, making thermal-heavy generation increasingly expensive to sustain at stable tariff levels.
The Trades Union Congress (TUC) has pointed out that the tariff increases effectively wipe out the value of the 2026 pay rise, leaving workers in a worse financial position than in 2025. The TUC formally engaged the PURC on the tariff implications for workers, questioning why employees should absorb utility cost increases while wage adjustments lag behind.
Ghana’s energy sector carries an accumulated debt estimated at US$3.1 billion as of March 2025. The Energy Sector Levy, implemented in July 2025, added GH¢1 per litre to fuel products to help pay down that debt, though its effect is ultimately felt by consumers through fuel-related costs.
The threat to the government’s flagship 24-hour economy policy is a particular concern. The policy is designed to create additional jobs through extended operating hours across key sectors, but it depends on businesses having the financial capacity to run night shifts and third production cycles. Rising electricity costs remove that incentive directly.
The Food and Beverage Association of Ghana (FABAG) has renewed calls on the government to tackle systemic inefficiencies within the energy sector rather than continuing to pass rising costs to end consumers. Industry voices argue that restoring financial health to the power sector should not come at the expense of economic recovery, and are urging policymakers to accelerate investment in cheaper, renewable energy sources ahead of the March review.
The PURC has framed the current trajectory as front-loading necessary pain so that utilities can meet payment obligations to independent power producers, service infrastructure loans and invest in upgrades. The regulator has warned that failure to do so risks a return to load shedding that would damage households and businesses far more than a single-digit tariff adjustment. Whether that argument remains socially and economically sustainable through four more years of quarterly reviews is the question that neither the regulator nor the government has yet fully answered.
SOURCE: newsghana.com.gh