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 embedded in tariff computations, according to a policy review conducted by the Centre for Environmental Management and Sustainable Energy (CEMSE).
The policy think tank contends that prevailing macroeconomic conditions warrant a double-digit reduction in electricity tariffs, projecting a possible 11 percent cut in the first quarter of 2026.
At the core of the dispute is the methodology employed by the Public Utilities Regulatory Commission (PURC) in determining Q4 2025 tariffs. The Commission applied a projected exchange rate of GH¢11.9735 to the US dollar, which was subsequently adjusted upward to GH¢12.3715 to account for alleged under-recoveries.
However, CEMSE notes that the actual average exchange rate for the period stood at GH¢10.8733 to the dollar. The disparity, the report argues, resulted in an over-recovery of GH¢1.1002 per dollar.
When applied to total electricity consumption of 6,459 gigawatt-hours for the quarter — on the assumption that 60 percent of generation costs are dollar-denominated — the report estimates that consumers paid approximately GH¢1.5 billion in costs that utilities did not incur.
Beyond exchange rate assumptions, the review also identifies inconsistencies in inflation projections. While PURC utilised an annual inflation rate of 12.43 percent in its Q4 tariff model, the actual average inflation rate for the period was 6.6 percent — nearly half of the projected figure.
CEMSE further questions the effectiveness of successive tariff increases, citing volatile revenue performance at the Electricity Company of Ghana (ECG). ECG reportedly generated GH¢1.4 billion in revenue in April 2025 prior to the initial round of tariff hikes. Following a 14.75 percent increase, revenue declined to GH¢1.3 billion in May, rose to GH¢1.6 billion in June, and fell again to GH¢1.3 billion in August despite additional upward adjustments.
With the exchange rate currently hovering around GH¢10.99 to the dollar and projected inflation for Q1 2026 estimated at 3.4 percent, CEMSE maintains that failure to implement a substantial tariff reduction would undermine the credibility of the quarterly tariff review mechanism.
The organisation insists that any over-recoveries must be formally acknowledged and credited to consumers before further tariff adjustments are introduced.
It cautions that inaction could erode public trust in the regulatory framework while intensifying financial pressure on households and businesses already grappling with economic constraints.
