Ghana has been ranked 1st in West Africa and 9th in Africa with the cheapest cost of electricity for the household
The country has also been ranked 27th in the world.
A report by the Global Petrol Prices indicated that in Ghana, the cost of electricity per kilowatt/hour for the household is $0.046 which is less than a dollar.
The world average price of electricity is pegged at $0.133 per kilowatt/hour (kWh) for household users and $0.124 per kWh for business users.
The data provided the price per kWh calculated at the average annual household electricity consumption for each country and also the cost per kWh at 25%, 50%, 75%, 150%, 200%, and 300% of the annual household electricity consumption.
Sudan has the cheapest electricity tariff in the Africa and the world for the household.
ECG tariff proposal
Meanwhile, the Electricity Company of Ghana (ECG) has proposed to the Public Utilities Regulatory Commission (PURC), seeking approval for the upward review of electricity tariff by 148% for 2022.
For the subsequent years – from 2023 to 2026 – the ECG is seeking further approval for a 7.6% tariff increase on its Distribution Service Charge (DSC) which is the charge for distributing electricity to Ghanaian households.
ECG in its multi-year tariff review proposal for the period from 2022-to 2026, asserts the high tariff increase is attributable to the cost of investment projects, the existing gap between actual cost recovery tariff and PURC approved tariffs, and the effect of macroeconomic factors such as inflation and exchange rate.
According to ECG, the current DSC of GHS 16.10/kWh is inadequate and has eroded the financial viability of the ECG which has had an adverse impact on the entire distribution sector.
It believes that with a DSC charge of GHS 39.95/kWh – that is the 148% increment – it will be able to recover the actual cost of electricity distribution and remain financially viable.
It said: “The result of ECG’s tariff proposal for the next five years shows an approximately 148% increase on the current DSC1 in 2022 and an average increase of 7.6% year on year from 2023 to 2026. The high increase in the DSC1 for the year 2022 could be attributed to the gap that has developed over the years between the actual cost recovery tariff and the PURC approved tariffs as well as the cost of completed projects”.
“Similarly, ECG’s proposed DSC2 shows a higher increase of 28.4% in the first year (2022) while that of the subsequent years increases by an average of 2% from 2022 to 2026.”
The power distributor again pointed out that its financial sustainability is important as it impacts the entire energy sector.