BTA2023 Ghanaian electricity consumers may have overpaid an estimated GH¢1.5 billion in the fourth quarter of 2025 due to inflated exchange rate and inflation assumptions used in tariff calculations, according to a new policy review by the Centre for Environmental Management and Sustainable Energy (CEMSE).
The group is now calling for an 11% reduction in electricity tariffs in the first quarter of 2026 to correct what it describes as “over-recovery” by utilities.
Exchange Rate Assumptions Under Scrutiny
At the centre of the debate is the tariff methodology adopted by the Public Utilities Regulatory Commission (PURC).
For Q4 2025, PURC applied a projected exchange rate of GH¢11.9735 to the US dollar, later adjusted upward to GH¢12.3715 to account for under-recovery claims.
However, CEMSE notes that the actual average exchange rate during the quarter stood at GH¢10.8733, resulting in what it estimates as an over-recovery of GH¢1.1002 per dollar.
Applying this discrepancy to total quarterly electricity consumption of 6,459 gigawatt-hours, and assuming that 60% of generation costs are dollar-denominated, CEMSE calculates that consumers may have paid roughly GH¢1.5 billion in costs utilities did not incur.
Inflation Projections Also Questioned
The report further challenges inflation assumptions used in tariff modeling.
While PURC applied an annual inflation rate of 12.43% for Q4 2025, actual average inflation for the period was 6.6% — nearly half the projected figure.
CEMSE argues that these mismatches in macroeconomic inputs significantly inflated end-user tariffs.
ECG Revenue Trends Raise Further Questions
Despite successive tariff hikes, revenue performance at the Electricity Company of Ghana (ECG) has remained volatile:
- April 2025: GH¢1.4 billion (before tariff increases)
- May 2025: GH¢1.3 billion (after 14.75% hike)
- June 2025: GH¢1.6 billion
- August 2025: GH¢1.3 billion (despite further increases)
The think tank suggests that higher tariffs have not translated into consistent revenue growth, raising concerns about affordability and demand elasticity.
Call for Tariff Adjustment
With the exchange rate now around GH¢10.99 to the dollar and projected Q1 2026 inflation at 3.4%, CEMSE maintains that failing to implement a significant tariff reduction would undermine the credibility of Ghana’s quarterly tariff review mechanism.
The group is urging PURC to:
- Officially recognise over-recoveries
- Credit excess payments back to consumers
- Reflect updated macroeconomic indicators in Q1 2026 tariffs
CEMSE warns that inaction could erode public confidence in the regulatory framework and intensify financial pressure on households and businesses.
