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Opinions of Thursday, 22 October 2015

Columnist: Daily Guide

Looming utility tariff hike outrageous!

Opinion Opinion

There is an ominous utility tariff hike in the air. Such hikes are becoming too many and cynics think they constitute a cornerstone of the incumbent political administration in the country. We would be hard-pressed not to concur with this position.

The president appears to have already given his blessing to the scathing rise. This is amply deductable from his remarks when he said that those who want uninterrupted power supply and by extension water, should be ready to pay more.

One of the critical issues arising from the president’s remarks suggests that after all, the dumsor end announcement as we have been told, is dependent upon Ghanaians’ ability to pay for the cost of electricity.

Perhaps had business owners been told earlier to pay more to obviate the predicament they found themselves in and continue to do so, they would have considered that option, no matter the accompanying financial pain that it is going to visit on them, including laying off staff.

We cannot tell why a Public Utility Regulatory Commission (PURC) team continues to ostensibly sample the stance of Ghanaians about a 100 percent tariff hike in respect of electricity and water when the president has already given his nod to the rise. Perhaps the team is only engaged in a ruse and nothing else.

The proclivity of government turning to consumers when it is pushed to the corner by mounting debts occasioned by bad management of the economy, is getting out of hand and very soon it would reach its zenith. At this stage government would be unable to proceed with further hikes and what follows can best be conjectured.

Two years ago we were greeted with an unusual percentage tariff hike – the increment presented in a manner that sought to put the responsibility for the rise solely on the management of the utility companies.

At the time that the Ghanaian consumers shouldered the extra burden, they were assured that it was a full cost recovery mechanism. For observant consumers they could only cross their fingers and watch how much the increase was going to affect the fortunes of the utility companies and in the end enhance their efficiencies. It was on account of that conviction that they shouldered the increase stoically.

From all indications, it appears that the previous hikes had not assisted in turning things around, the ripple effect of the bad management of the economy. When the cedi fails to find its feet against the major convertible currencies against the backdrop of the imports of inputs for electricity generation and water treatment and distribution, the end result is increased cost of the utilities. The cost of inefficient running of the government affects everything – those at the helm being responsible. Unfortunately, the poor consumer bears the brunt.

Now that another cost-recovery driven increase is going to be implemented, we wish to ask what happened in the period between the last one and now.

If the price of crude oil is one of the factors driving the urge to increase the cost of utilities, we are unable to as it were, make sense out of the scenario, of course logically. The price of crude oil has witnessed a record dip in recent times. So where is the logic?

The fact is that the Ghanaian consumer is suffering because of the inefficiencies associated with those at the helm; that’s all.